Japanese shares continue to rise despite weak trade data

Nikkei stock board Image copyright Getty Images

Japanese shares have risen, despite the latest trade figures showing exports falling for a third straight month.

The country's exports fell by 8% in December from a year earlier, suggesting that China's slowdown continues to affect demand.

The Nikkei 225 index rose 0.9%, closing at 17,110.91, building on Friday's rally when it climbed almost 6%.

Markets surged late last week on hints that central banks in Europe and Japan would continue monetary easing.

Central bank action

On Thursday, sentiment got a boost as European Central Bank president Mario Draghi suggested the bank would review its policies in March and could launch further stimulus.

One day later, media reports suggested that the Bank of Japan (BOJ) would also ease further.

Image copyright AFP
Image caption The BOJ is expected to act on Friday

The BOJ is set for its first meeting of 2016 later this week, where it is expected to make a policy announcement as weak growth and a drop in oil prices weigh on its attempts to lift inflation.

"Markets have rallied on hints of further easing by the ECB and speculation that the BOJ will follow suit," market analyst Angus Nicholson of IG explained in a note.

"But there has been no major change in fundamentals to support the rally, and the concern is if and when it fizzles out, markets could even drop below their recent lows."

China rebound continues

Led by energy shares, Chinese markets also continued last week's strong finish, trading higher both in Hong Kong and on the mainland markets.

The Hang Seng index in Hong Kong closed up 1.36% at 19,340.14, while the Shanghai Composite finished the day up 0.75% at 2,938.51.

In Australia, the benchmark S&P ASX 200 closed 1.8% up at 5,006.60 points.

The commodity-heavy market was helped by a rebound in both oil and iron ore prices.

In South Korea, the Kospi index followed the region's trend, increasing 0.7% to close the day at 1,893.43 points.