Asian markets extended gains Friday on news the U.S. government was working on a policy to ease subprime woes.
Shares in China and Hong Kong hit record highs. Australian stocks reached their highest level in five weeks, and stocks rose in Singapore, Taiwan and Thailand.
In Tokyo, the benchmark Nikkei 225 stock index added 415.27 points, or 2.57 percent, to close at 16,569.09 points on the Tokyo Stock Exchange.
The broader Topix index, which includes all shares on the exchange's first section, added 40.02 points, or 2.55 percent, to 1,608.25 points.
Global markets have been volatile in recent weeks since the emergence of the U.S. subprime mortgage crisis and the resulting tightening of credit. But later Friday U.S. President George W. Bush reportedly will announce initiatives to help overstretched U.S. homeowners cope with the housing slump, giving Asian investors a renewed appetite for stocks.
Japanese exporters such as Toyota Motor moved higher as the yen weakened on the U.S. news. A weak yen helps inflate the overseas earnings of exporters and makes their shipped products less expensive abroad. Banks as well advanced on news of Bush's planned subprime initiatives.
Gainers in Japan Friday included Toyota, up 3.68 percent, and Mitsubishi UFJ Financial Group Inc., which added 1.83 percent. Commodity-related shares such as trading companies and nonferrous metal companies also gained ground. Mitsui and Co. rose 6.64 percent.
"Trading houses are among foreign investors' favorite names," said Motomi Hiratsuka, head of Japan client coverage at BNP Paribas.
Hong Kong's benchmark Hang Seng Index jumped 499.6 points, or 2.13 percent, to a record close of 23,984.14 after touching an intraday high of 24,089.00 minutes into the afternoon session.
"It's clear investors' risk appetite is very strong," said Ben Kwong, chief operating officer of KGI Asia Ltd. "I think their earlier worries about a global credit crunch triggered by US sub-prime mortgage problems have subsided," he said.
China Mobile, Hong Kong's biggest stock by market capitalization, closed 3.8 percent higher after hitting its own intraday record high. It contributed 200 points, or 40 percent, to the Hang Seng's gains and was the most heavily traded stock on the exchange.
Property stocks rose on hopes that potential interest rate cuts will fuel sales of residential properties. The Hang Seng Index property subindex finished up 2.67 percent.
Investors have been speculating the U.S. Federal Reserve will likely lower its fund rate in September to keep the U.S. economy from faltering. Interest rates in Hong Kong usually follow because the local currency is pegged to the dollar.
Sun Hung Kai Properties rose 3.6 percent, and Cheung Kong Holdings jumped 2.4 percent.
In Tokyo currencies, the U.S. dollar was trading at 116.38 yen early Friday evening, up from 115.74 yen late Thursday in New York. The euro rose to US$1.3668 from US$1.3637.
BANGKOK: Thai shares climbed on optimism over President Bush's speech and growing expectations the U.S. Fed will cut interest rates. The SET Index rose 2.7 percent to 813.21.
JAKARTA: Indonesia's benchmark JSX Composite stock index rose 43.62 points, or 2 percent, to close at 2,194.34 in moderate volume.
KUALA LUMPUR: Malaysia's markets were closed Friday for the Independence Day holiday.
MANILA: Philippine stocks were boosted by stronger-than-expected second-quarter economic growth. The 30-company Philippine Stock Exchange Index gained 44.95 points, or 1.4 percent, to 3,365.29.
MUMBAI: Indian shares rose Friday boosted by gains in Tata Steel and automobile companies. The Bombay Stock Exchange's 30-share Sensex index moved up 197 points, or 1.3 percent, to end at 15,318.6 points.
SEOUL: Korea's share prices rose in light trade, with the Korea Composite Stock Price Index, or Kospi, gaining 31.54 points, or 1.7 percent, to close at 1873.24.
SHANGHAI: Chinese stocks rose to a record close, with airlines and steel makers soaring on expectations of strong corporate earnings. The benchmark Shanghai Composite Index gained 50.94 points, or 1 percent, to 5,218.83 _ the first time it has closed above 5,200. The Shenzhen Composite Index rose 1.3 percent to 1,457.83, also a record close.
SINGAPORE: Singapore shares closed higher after a volatile session as investors hunted for bargains. The Straits Times Index closed up 71.76 points, or 2.2 percent, at 3,392.91, after rising to as much as 3399.35 in the early afternoon.
SYDNEY: Australia's share market rose to its highest level in five weeks, with the benchmark S&P/ASX 200 up 1.8 percent at 6,247.2.
TAIPEI: Taiwan shares rose on strength in neighboring markets, with renewed interest emerging for battered financial issues. The Weighted Price Index of the Taiwan Stock Exchange gained 210.95 points, or 2.4 percent, to close at 8,982.16 points.
WELLINGTON: New Zealand shares closed modestly higher as investors digested a relatively lackluster earnings season and worried about the health of local finance firms. The main stock index gained 11.37 points, or 0.28 percent, to close at 4,118.97.