Data Lift Asian Markets

By DANIEL INMAN

Asian markets were mostly higher on Monday, as investors started the month digesting a wide range of regional economic data, while sentiment remained positive after the European summit.

Japan's Nikkei Average was up just 0.2%, paring its early gains, after the Bank of Japan's quarterly tankan survey, a measure of business confidence in Japan, exceeded expectations. The survey's headline diffusion index for manufacturers improved to a reading of minus one, compared with a minus three forecast by economists.

The strong result in the tankan reflects "a steady recovery in exports, especially in the auto industry," said RBS Securities chief economist Junko Nishioka. As the car industry has a broad industry base, its recovery is "creating a ripple effect throughout other sectors of the Japanese economy."

The Japanese benchmark was also helped by a weakening yen. The dollar was at 79.82, maintaining a 0.5% gain against the yen made on Friday. Local exporters were slightly higher, with Sony 0.4% higher and Canon gaining 0.5%.

The main economic number to come out over the weekend was relating to Chinese manufacturing, which although lower than in May, came in higher than expected. The official purchasing managers' index, released over the weekend, reached 50.2—its lowest level since November, but higher than a predicted 49.8. A score above 50 indicates an increase in manufacturing activity over the month. HSBC's rival figure will come out later in the session.

The China Shanghai Composite fell on the manufacturing data, down 0.1%, while Hong Kong's Hang Seng Index was closed due to a public holiday.

South Korea reported a larger-than-expected trade surplus over the weekend, which helped push the dollar close to an eight-week low against the South Korean won early in the session, to 1,142.70.

Australia's S&P ASX 200 gained 1.3%, South Korea's Kospi was flat, and Singapore's Straits Times Index was up 0.7%.

In addition to the regional economic data, sentiment in Asia was still strong after the summit of European leaders, which finished on Friday with an agreement that exceeded widespread low expectations. Concerns about the European debt situation eased after leaders agreed to create a single bank supervisor for the euro zone, and that bailout funds should be able to directly boost the capital of struggling banks without adding to government debt.

The euro however, started to weaken early on Monday. At $1.2632, the single currency gave up some of the 1.8% gain that it made on Friday, when it climbed $1.2661.

Miners across the region benefitted from an increase in commodity prices, including copper, which on Friday touched its highest price since late May. The effect was most apparent on the resource-heavy Australian market, where Rio Tinto and BHP Billiton lead a broad advance in mining stocks, climbing 0.8% and 1.4% respectively.

Gold dropped slightly to $1590.60 an ounce early Monday, eating into some of the 3.5% gain it made on Friday. The increased value of the precious metal proved a boon for gold miners, such as Newcrest Mining in Australia gained 3.6%.

Write to Daniel Inman at daniel.inman@wsj.com