KUALA LUMPUR (July 27): The FBM KLCI rose 2.14 points or 0.1% after the Japanese government announced a 28 trillion yen (US$265.3 billion) economic stimulus package to support the country's economy.

The Japanese Government's move was seen prompting the Bank of Japan to ease monetary policy, which could weaken the yen and strengthen the country's equity markets.

In Malaysia, the KLCI closed at 1,663.56 points. Across Asian share markets, Japan's Nikkei 225 rose 1.72%, while Hong Kong's Hang Seng closed 0.4% higher.

Reuters reported that Japanese Prime Minister Shinzo Abe said his government would compile a stimulus package of more than US$265 billion next week to reflate the flagging economy, although it was unclear how much would be spent to directly boost growth.

The size of the package, at 28 trillion yen (US$265.30 billion), exceeds initial estimates of around 20 trillion yen and is nearly 6% the size of Japan's economy. It will consist of 13 trillion yen in "fiscal measures", which likely includes spending by national and local governments, as well as loan programmes.

Abe's announcement came earlier than expected and pressures the Bank of Japan to match his big spending plan with additional monetary easing, at its rate review ending on Friday.

In Malaysia, JF Apex Securities Bhd research head Lee Chung Cheng told theedgemarkets.com that investors were expecting the KLCI to rise by a larger quantum.

He said renewed concerns on the U.S.' potential interest rate hike, dampened Malaysian share market sentiment.

“There is still a lot of uncertainty at the moment,” Lee said.

Across Bursa Malaysia, gainers led decliners by 430 to 343. Volume was 1.75 billion shares, valued at RM1.71 billion.

Top gainer was Panasonic Manufacturing Malaysia Bhd, while leading decliner included British American Tobacco (M) Bhd. TH Heavy Engineering Bhd was the most active counter, with some 180 million shares traded.