Asian Market Update: Most risky assets in Asia end the week on a positive note, after more details from the US Treasury's financial rescue plan surfaced

- In terms of equities, at the time of writing, most Asian indices are trading higher after US stocks sharply pared their losses in late Wall Street trading, following a report that the Obama Administration proposed lowering mortgage defaults by having the government subsidize certain mortgages. The plan is seen as different from the existing mortgage assistance programs because it would seek to help homeowners before they fall behind on their payments. In terms of specific Asian equities, shares on the Nikkei are higher by more than 0.90%, led by gains in shares of banks.
Additionally, Japanese exporters are higher due to the weaker yen. In Australia, equities are gaining by more than 1%, as the country's parliament approved the government's stimulus plan. Advances on the S&P ASX 200 are being led by financials and gold miners. In South Korea, equities are higher on gains in shares of financials, which offset the declines in chipmakers. In Hong Kong, the Hang Seng is gaining for the first time in three sessions, led by rises in shares of most banks and metals company Chalco. In Taiwan, equities are gaining more than 2%, led by electronics companies. In China, the Shanghai Composite is gaining by more than 1% on advances in shares of insurance companies and automaker SAIC Motor. In other Asian equities trading, shares in Singapore are higher by more than 0.50% (note all equities quotes are as of 12:15 AM EST).

- In foreign exchange, volatility in the Asian session was mainly contained to macro-oriented developments in New Zealand and Australia. NZD/USD briefly fell below 0.52 in the aftermath of a worse than expected retail sales data for the month of December, after m/m headline figure came in below -0.7% estimate at -1.0% and core measure fell to -0.6% v -0.2% expected. In Australia, the lawmakers' deadlock over the new stimulus that cut short the post-employment data rally in AUD the day before was resolved after a compromise in negotiations with the holdout senator Xenophon.
AUD/USD rallied briskly to session highs of 0.6570 on the announcement, where it met with selling interest on technical resistance seen in early European session. Likewise, NZD/USD was technically constrained by 0.5190-0.5230 range following the Kiwi data. European majors recovered from early US session weakness as heavy risk aversion pushing EUR/USD to February support has subsided.
After trading down to near this month's lows around 1.27, EUR/USD popped back up to 1.29.
USD/CHF tracked EUR/USD closely, briefly testing the upside of 1.17 along with US equity weakness before falling back down to 1.16. GBP/USD came within 25 pips of a 10-day low near 1.4150, but bounced back above 1.4320 - a level where former support has turned into a resistance. Japanese Yen was also largely weaker in step with recovery in US and a bounce in Tokyo equities. USD/JPY broke above 91.00 for the first time in 3 days, EUR/JPY tested minor resistance just above 117, and GBP/JPY was poised to rally above the psychological 130 level. With a notable decline in yen-boosting deleveraging, Japan's Finance Minister also said that he did not expect to see an FX oriented discussion at the G7 meeting this weekend.

- Commodities: After nearly testing the multi-year lows of just above $33 seen in mid-December, front month crude prices bounced back above $34. As the tumultuous first quarter of 2009 reaches its halfway point, energy markets are clearly looking beyond the signals from OPEC about additional cuts to boost prices, remaining focused on the factors driving falling demand amid the slowdown in the global economy. Meanwhile, gold prices have continued to benefit from "nowhere to hide" panic sentiment as well as coordinated efforts of policymakers to reflate at all costs. Boosted by technically-meaningful breach above the $930 hurdle and fresh evidence of record highs in gold levels for the SPDR GLD fund, spot prices continue to reside above $940.