Regional stock markets leapt higher yesterday, powered by strong manufacturing and export data in South Korea, Taiwan and Singapore coupled with regulatory strong-arming in Japan. Key indices rose 3.63 per cent in Japan, 3.57 per cent in Taiwan, 2.61 per cent in Korea and 1.18 per cent in Singapore after Seoul and Taipei surpassed expectations in industrial output for last month. On Monday, Singapore surprised with its first rise in industrial production since May. Hong Kong again lagged, with the Hang Seng Index rising just 0.96 per cent, mostly on gains in such stocks as China Mobile Hong Kong, which do not do business in the SAR. Figures suggest Hong Kong's exports are declining, unlike others in the region. On Monday, the Government announced a 12.2 per cent year-on-year slump in exports for last month. Technology-heavy South Korea and Taiwan are rebounding as exports rise to fill depleted inventories. This can be sustained only if fundamental demand recovers. Yesterday's higher than expected figures cheered optimists. South Korea's industrial output jumped 10.2 per cent last month after a median forecast of 8.4 per cent. Taiwan almost doubled industrial production expectations with an 11.98 per cent year-on-year rise. Taiwan's export orders rose 9.16 per cent compared with a 6.9 per cent consensus forecast. 'What we're seeing is a manufacturing recovery as US companies boost their inventories,' said John Dolfin, an analyst on JPMorgan's Asian strategy team. 'If that's all that there is . . . then I think [markets have] already priced it in. But if - as we believe as a house - this is a start of a more protracted Asia recovery, then there's room [for stocks to run further].' Nomura International strategist Sean Darby, however, said he was worried financing costs could keep a lid on technology spending by corporates. 'The second part of the [inventory rebuild] cycle will require United States corporates to borrow money to invest in new infrastructure but conditions in the US bond market are quite prohibitive for financing long-term investment,' Mr Darby said. Regional stocks markets were also helped by the 370.46-point rally for Tokyo's Nikkei-225 Index to 10,573.09 amid a crackdown on short-selling. Thailand, for instance, rose 4.36 per cent.