Investing.com - Investing.com - Asian stock markets closed higher in thin post-holiday trade on Wednesday, with shares in Tokyo surging to a nine-month high on the back of a weakening yen, which fell to a 20-month low against the U.S. dollar.
Bourses in Hong Kong and Australia remained shut for holiday, with both due to reopen Thursday.
Japan's Nikkei 225 Index ended up 1.5% to close at the highest level since March 27, as incoming prime minister Shinzo Abe was expected to announce his cabinet lineup later in the day after being formally approved as premier by the lower house of parliament earlier.
Abe has recently called for unlimited easing by the Bank of Japan in order to weaken the local currency and spur growth in the recession-hit economy.
Exporters advanced on the back of a weakening yen, which traded at a 20-month low against the U.S. dollar and a 16-month trough against the euro.
Consumer electronics makers Sony and Sharp rallied 4% and 15.4% respectively, while automakers Honda and Nissan added 1.3% and 2.1% apiece.
The Nikkei has rallied nearly 18% in the past six weeks, with exporters amongst the most notable gainers, as ongoing weakness in the yen boosted the outlook for export earnings.
Meanwhile, market players remained focused on developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
Without a deal, the U.S. could fall back into recession and drag much of the world down with it.
President Barack Obama plans to return early from his vacation to Hawaii in order to take part in talks to avert the crisis ahead of the year-end deadline, reports said late Tuesday.
Markets in Europe will remain closed Wednesday for the Boxing Day holiday.
Meanwhile, the U.S. is to publish industry data on house price inflation as well as a report on manufacturing activity in Richmond later in the trading day.
Volumes are expected to remain light because many investors have closed books to lock in profit before the end of the year, reducing liquidity in the market and increasing the volatility.
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