Stocks in Tokyo perked up on Thursday as investors shrugged off data showing the Japanese economy contracted in the last quarter of 2012 and focus turned to encouraging company earnings.

The benchmark Nikkei 225 index closed 55 points ahead at 11,307 in Japan while the Hang Seng advanced 198 points at 23,413 following its extended holiday break. Mainland markets will stay closed this week.

Japan's economy contracted for the third consecutive quarter during the three months to end of December, the latest figures showed, as the new government struggles to boost the economy and fight deflation. Japan has been fighting deflation for nearly a decade.

Japanese gross domestic product (GDP) contracted by 0.1% in the final quarter of 2012, despite expectations of growth of at least 0.1%.

As expected, the Bank of Japan held off from fresh monetary action on Thursday, keeping interest rates at between zero to 0.1%.

However markets expect aggressive monetary easing under Bank of Japan Governor Masaaki Shirakawa's successor after his planned exit in March, almost three weeks ahead of his five-year term.

His departure is expected to boost Prime Minister Shinzo Abe's campaign for aggressive monetary easing to stimulate the Japanese economy.

Company earnings overshadowed the disappointing GDP figures and the BoJ's decision to stay pat on monetary policy.

Brewer Asahi soared 5.8% after reporting record full year profit. Meanwhile shares of exporters such as Toyota Motor climbed in heavy trading. Last week the group increased its operating profit forecast to ¥1.15trn, the most in five years.

In Hong Kong banks and property counters were sought after. Shares of heavyweight HSBC rose 1.5% while ICBC added 2.5%.

China Overseas Land & Investment added 2.5% while China Resources Land advanced 3.3%.



CJ

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