Japan's Nikkei average rose 0.9 per cent to hit its highest close in seven weeks today, with bank shares soaring after a report that global banking regulators are eyeing effectively delaying the implementation of new capital rules.
Real estate stocks such as Mitsui Fudosan gained on hopes banks might lend more following the same report by the Nikkei business daily that the Basel Committee on Banking Supervision has agreed to establish a transition period of at least 10 years for new capital rules.
In active trade, the benchmark Nikkei added 93.93 points to 10,177.41, its highest finish since October 27th.
The broader Topix gained 1.5 per cent to 898.29.
Mizuho Financial Group, Japan's second-biggest bank, vaulted 15.2 per cent to 182 yen.
Sumitomo Mitsui Financial Group surged 14.3 per cent to 3,030 yen.
The expected implementation of new capital rules was behind Mitsubishi UFJ Financial Group's decision to raise about 1 trillion yen through a new share issue.
Shares in the country's top bank rose 4.9 per cent to 470 yen.
Analysts have said Sumitomo Mitsui Financial Group and Mizuho Financial Group, may have to follow Mitsubishi UFJ and raise more funds, and worries about such new issuance have been weighing on the sector and the market.
The news of the potential grace period cheered Japanese property stocks, which were hit as the global economic crisis squeezed financing and drove investors out of the property market.
Mitsui Fudosan added 2.4 per cent to 1,597 yen and Sumitomo Realty & Development climbed 3.1 per cent to 1,764 yen.
Japan Airlines Corp rose 3 per cent to 103 yen after saying on Tuesday that most of its retirees were willing to accept proposed cuts to pension payouts, a key step needed to secure approval for reducing its pension burden, which is a prerequisite for receiving a government bailout.
Shares of Noritz Corp jumped 4.7 per cent to 1,156 yen after the maker of gas bath heaters and water heaters raised its sales and profit forecasts for the year ending this month, citing better-than-expected demand.
Some 2.7 billion shares changed hands on the Tokyo exchange's first section, above last week's daily average of 2.2 billion.
Advancing stocks outnumbered declining ones by nearly 3 to 1.
Reuters