Asian Stocks Rebound to Close Higher

Updated from 12:25 a.m. EST

By Jeremiah Marquez

HONG KONG -- Asian stocks rebounded Friday from the previous day's rout, with Tokyo's index closing up 2.6%, as the U.S. bailed out Bank of America (BAC) again and a weaker yen lifted exporters like Toyota(TM).

Trading was cautious early on after a tumultuous week that saw markets fall sharply, with some investors picking up beaten down shares but still wary of more trouble ahead as economies contract and company profits shrink.

Investors found a glimmer of hope after Wall Street regained its footing on signs the U.S. government would do whatever is necessary to prevent its economy from sinking deeper into recession.

American lawmakers authorized a second $350 billion from the government's emergency bailout funds as speculation mounted that debt-laden banks would need even more rescue money.

Hours after the approval, Bank of America reached an agreement for an additional $20 billion in fresh capital from the government's rescue fund, plus guarantees against losses on up to $118 billion in troubled assets. The bank was to use the aid to help it absorb losses from its acquisition of Merrill Lynch.

Asian tech shares got a lift after heavyweight U.S. chipmaker Intel(INTC) suggested margins might improve in the second half this year, even as it reported a 90% plunge in fourth quarter profit.

In Japan, the Nikkei 225 stock average closed up 2.6% to 8,230.15 as automakers and other exporters gained. Toyota, which said Thursday it was making further production cuts in North America, jumped 6%, and Honda rose 8%. Honda said Friday it was slashing Japan production by an additional 56,000 vehicles amid a global slump and planned to cut 3,100 jobs in Japan so it will have no temporary workers at all.

Hong Kong's Hang Seng rose 0.09%, while in mainland China the Shanghai Composite Index climbed 1.8%.

Markets were trading higher in Europe. The FTSE 100 index rose 1.7%, while the DAX in Frankfurt gained 2.2%.

The markets found support from Wall Street, where markets staged a turnaround to close higher. The Dow Jones Industrial Average rose 12.35, or 0.2%, to 8,212.49 after falling the past six days.

Broader stock indicators also advanced, with the S&P 500 index up 1.12, or 0.1%, to 843.74 and the technology-heavy Nasdaq composite index gaining 22.20, or 1.49%, to 1,511.84.

Wall Street looked to build on those gains as U.S. market futures advanced Friday.

Oil prices were slightly higher, with crude light, sweet crude for February delivery up 41 cents at $35.81 a barrel. Overnight, the contract fell 5%, or $1.88, to settle at $35.40, swooning as low as $33.20 during the session.

The dollar strengthened to 90.28 yen, up from 89.92 yen, and the euro rose to $1.3228 from $1.3155.

>To order reprints of this article, click here: Reprints