SINGAPORE, May 22: Fresh signs of regional recovery drove Asia’s key stock markets higher on Wednesday, while Japan intervened to rescue a swooning dollar and gold glittered after fresh terror fears in the United States.

The dollar jumped from a five-month low after Japan intervened in the foreign exchange market, selling its own currency for the U.S. unit for the first time since September.

Spot gold spurted to a 27-month high of $318.20 an ounce in Asia by mid-afternoon, as investors scrambled for a safe-haven asset with war fears mounting on the India-Pakistan border, tensions deepening in the Middle East and jitters about terror attacks in the United States.

Tokyo shares closed at a nine-month high with banks, builders and consumer issues in the money after a string of data, including March industrial output on Wednesday, offered more evidence the worst is behind the world’s second-largest economy.

The benchmark Nikkei average closed up 1.36 per cent at 11,961.98 after the all-industries index posted a 0.6 per cent rise in the first quarter, its first increase in four quarters.

Finance Minister Masajuro Shiokawa said in a statement Japan would keep intervening to keep the yen down.

The dollar was at 124.73/yen but had slipped to $0.9241/euro from $0.9200 in late US trade.

Pakistani stocks lost more than four percent after reports of border clashes with India and the death of a prominent Kashmiri leader, dealers said.

But Australian stocks gained as gold and financials emerged as defensive plays, taking heed of the US jitters without being handcuffed to Wall Street’s weakness.

The benchmark S&P/ASX 200 index closed up 0.38 per cent at 3,389.8 with mining stocks again favoured as gold prices spike.

The Korea Composite Stock Price Index closed up 3.04 per cent at 863.06, after official figures showed South Korea’s economy grew 5.7 per cent year-on-year in the first quarter. The index has gained some 23 per cent so far this year.

Taiwan stocks turned around following an eight per cent drop the previous four sessions, as computer-related issues clawed back some of their losses. The benchmark TAIEX closed up 1.81 per cent at 5,541.64.

Hong Kong stocks rose slightly in late trade on hopes for an economic recovery and strong fund inflows, analysts said.

Singapore stocks were also flat on concerns about the US economy, the island’s biggest market. But optimism about the local economy helped push the benchmark Straits Times Index up 0.17 per cent to end at 1,733.47. —Reuters