Stocks in Hong Kong and mainland China rose on a tech rally, the yuan jumped, but Japan's market dropped the most since October amid growing speculation that the Bank of Japan's possible interest rate hike will lift the yen and hurt exporters.
This came as Pan Gongsheng, governor of the People's Bank of China said more plans related to Hong Kong's connect schemes with the mainland will be rolled out this year.
The Hang Seng Index advanced 234 points, or 1.4 percent, to close at 16,587 points while the Shanghai Composite Index added 0.7 percent.
The Hang Seng Tech Index climbed 2.9 percent, with e-commerce platform JD.com (9618) up 6.4 percent after a pick-up in Chinese inflation data last month suggested improving demand.
Xinyi Solar (0968) closed 11.2 percent higher yesterday, the best performer among blue chips, after analysts at firms including JP Morgan and Daiwa Securities Group cited market speculation China will allow a curtailment rate of more than 5 percent for power generated from renewable projects including solar farms. That should improve the outlook for solar installation, they said.
This came as Japanese equities slid the most since October 4, with the exporter-heavy Nikkei 225 declining 2.2 percent to 38,820.49, leading losses in Asia.
A rising number of policymakers are leaning toward ending negative rates due to expected larger wage increases this year. Data Monday showing the economy avoided falling into a recession at the end of last year also bolstered the case for the BOJ to raise rates for the first time since 2007.
In money markets, the onshore yuan jumped to a month high against the US dollar and the yen continued to rise on the rate-hike expectation.
Back to Hong Kong equities, Chinese liquor company ZJLD (6979) jumped 7.9 percent after it expected net profit to soar at least 130 percent to 2.3 billion yuan (HK$2.5 billion) from the previous year.
Gome Retail (0493) declined 4.6 percent after its sales revenue was expected to plummet by over 90 percent compared to the previous year.
In other news, the proposal to narrow bid-ask spreads of stock trading is expected to start consultation next quarter and may be launched within the year, said Tim Lui Tim-leung, the chairman of Hong Kong's Securities and Futures Commission.
The HSI rose 234 points to 16,587. Sing Tao
