LONDON (ShareCast) - Stocks in Tokyo rose to almost an eight-month high on Wednesday as investors gear up for Sunday's elections in Japan (EUREX: FMJP.EX - news) and the outcome of the US Federal Reserve policy meeting.
The benchmark Nikkei 225 (Osaka: ^N225 - news) index closed up 56 points at 9,581 in Tokyo while the Hang Seng Hong Kong rallied 179 points at 22,503.
Traders mostly overlooked reports of North Korea's missile launch. The White House condemned the launch of a long-range ballistic missile, saying it was, "a highly provocative act that threatens regional security."
Instead investors focused on optimism that the US central bank will announce measures to avoid the 'fiscal cliff'. Markets are also expecting the Fed to announce bond buying of $45bn a month as 'operation twist' expires at the end of 2012.
Meanwhile in Japan, investors were cheered by hopes that Shinzo Abe, the leader of the main opposition party, will win this Sunday's general election and bring about more aggressive easing policy from the Bank of Japan.
The weaker yen also fuelled demand for exporters, which spearheaded gains in Tokyo. Shares of Honda, Toyota, Toshiba (Other OTC: TOSBF.PK - news) , Canon (Other OTC: CAJFF.PK - news) and TDK (Dusseldorf: 763593.DU - news) all marched higher.
Panasonic (Berlin: MAT1.BE - news) surged over 7% after report said the company plans to sell the digital camera operations of its subsidiary Sanyo Electric (Dusseldorf: 763240.DU - news) .
Elsewhere in Hong Kong, property firms bagged the day's biggest gains with shares of Cheung Kong Holdings (Other OTC: CHEUF.PK - news) rising 1.9% while China Overseas Land & Investment added 2.7%.
Casino (Paris: FR0000125585 - news) stocks were also in demand after upbeat coverage from Swiss broker Credit Suisse (NYSEArca: CSMA - news) . Sands China (Berlin: 599A.BE - news) and Galaxy Entertainment both firmed 3%.