Japan stocks zoom on stimulus hopes after poor growth data

A child is carried past red lanterns set up for the Spring Festival holidays in Beijing, China, Monday, Feb. 15, 2016.

Japan’s Nikkei.N225 slipped 1.0 percent after it climbed 7.2 percent on Monday, its biggest daily gain since 2008 which recovered a large portion of its 11 percent slump last week – also its biggest since 2008.

Japanese stocks rocketed Monday, leading most Asian markets higher after dismal growth data raised hopes of extra stimulus for the world’s third-biggest economy, weakening the yen.

After initially falling 1% in early trade, the benchmark Nikkei 225 was up 0.72% to 16,138.48 by late morning.

As risk sentiment improved, yields on top-rated government bond rose, with the 10-year U.S. Treasuries yield rising 4.7 basis points to 1.793 percent from 1.746 percent at the end of last week.

The greenback advanced for a second day versus the currencies often perceived as haven assets after a report Friday showed USA retail sales increased more in January than forecasts.

His euro zone opposite number, Mario Draghi, knocked another half a percent off the euro and yen in afternoon trade, pointing to more steps the bank can take to support credit and get the economy moving again.

RENMINBI RELIEF: China’s strengthening currency also helped boost sentiment. The main NY benchmark rate drifted back below $30 a barrel on the news, though it was still trading 1 percent higher on the day at $29.75.

ANALYST’S TAKE: “Since the start of January everything went south and we really needed some positive news”, said Jackson Wong, associate director at Huarong International Securities.

The FTSE100 experienced one of its best days in six months last week Friday with the index surging over 3% on the back of the unexpected 12% rise in global oil prices which consequently boosted oil stocks.

Hong Kong’s Hang Seng rose 3.1% to 18,892.24.

Chinese mainland shares shrugged off the turmoil in global shares which occurred over the Lunar New Year holiday, with the Shanghai composite index.SSEC slipping just 0.6 percent. Benchmarks in Taiwan and most of Southeast Asia also rose.

Futures for the major indexes in the USA were all in the green on Monday, reacting to the global gains. Brent crude, a benchmark for global oils, gained 5 cents to $34.04 a barrel in London.

The Japanese currency – the yen – has performed exceptionally strongly up 6% against the U.S. dollar in February alone despite a 0.6% weakening following Monday’s data.

Having fallen more than 1 percent on Monday, the yen gained half a percent, trading at 114.08 (JPY=) against the dollar.