10:49 AM
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TOKYO: Asian shares recovered on Wednesday as solid euro zone data
calmed nerves jarred by potential political turmoil in Spain and Italy,
while the prospect of a dovish new governor for the Bank of Japan dragged the yen to a new low.
Sentiment for other risk assets also improved, pushing London copper up 0.4 per cent to $8,302.75 a tonne to a near four-month high, while Brent crude hovered near a 20-week high. Signs of recovery taking root in Europe, the United States and China have helped improve the demand outlook.
The MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3 per cent, tracking an overnight gain in global equities on data showing the U.S. services sector extended a three-year expansion in January and business activity in the euro zone climbed to a 10-month high last month.
The Standard & Poor's 500 Index and the Nasdaq Composite Index gained over 1 per cent.
In Asia, investors have been quick to book profits as prices approached their highs, but analysts and traders say any dip was likely to be seen as a chance to buy back into the market.
The pan-Asian index scaled a 18-month high on Monday, and was up about 2.3 per cent so far this year, considerably modest compared to the S&P's nearly 6 per cent gain in the same period.
Australian shares jumped 0.9 per cent, leading the regional peers.
"We're following on from a pretty good lead from global markets last night," said Steve Daghlian, market analyst at Commonwealth Securities, of Australian equities.
Brent crude was up 0.2 per cent to $116.72 a barrel while U.S. crude was barely changed at $96.64.
Japanese equities and government bonds rose while the yen touched fresh lows on expectations for stronger reflationary policies from the BOJ.
The dollar touched 93.91 yen to its highest since May 2010, while the euro also rose to 127.65 yen, its loftiest since April 2010. The Aussie reached a 4-1/2 year peak around 97.42 yen. The pound touched a 3-year high near 147.25 yen.
Yen selling resumed after Bank of Japan Governor Masaaki Shirakawa said he would step down on March 19, three weeks earlier than the official end of his five-year term, leaving at the same time as his two deputies, and raising the prospect that the next BOJ governor will more readily adopt the expansionist monetary policy demanded by Prime Minister Shinzo Abe.
"The Bank of Japan is about to get a lot more dovish, and sooner than previously thought," said Christopher Vecchio, a currency analyst at DailyFX.
Japan's benchmark Nikkei stock average soared 3.1 per cent to a 33-month high.
"I think the market could yet rise when they announce the new governor's name, particularly if it makes an asset purchase budget of 50 trillion yen ($535 billion) from the BOJ more likely," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley.
The 10-year JGB yield fell 1.5 basis points to 0.775 per cent after opening higher, at 0.800 per cent.
Sentiment for other risk assets also improved, pushing London copper up 0.4 per cent to $8,302.75 a tonne to a near four-month high, while Brent crude hovered near a 20-week high. Signs of recovery taking root in Europe, the United States and China have helped improve the demand outlook.
The MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3 per cent, tracking an overnight gain in global equities on data showing the U.S. services sector extended a three-year expansion in January and business activity in the euro zone climbed to a 10-month high last month.
The Standard & Poor's 500 Index and the Nasdaq Composite Index gained over 1 per cent.
In Asia, investors have been quick to book profits as prices approached their highs, but analysts and traders say any dip was likely to be seen as a chance to buy back into the market.
The pan-Asian index scaled a 18-month high on Monday, and was up about 2.3 per cent so far this year, considerably modest compared to the S&P's nearly 6 per cent gain in the same period.
Australian shares jumped 0.9 per cent, leading the regional peers.
"We're following on from a pretty good lead from global markets last night," said Steve Daghlian, market analyst at Commonwealth Securities, of Australian equities.
Brent crude was up 0.2 per cent to $116.72 a barrel while U.S. crude was barely changed at $96.64.
Japanese equities and government bonds rose while the yen touched fresh lows on expectations for stronger reflationary policies from the BOJ.
The dollar touched 93.91 yen to its highest since May 2010, while the euro also rose to 127.65 yen, its loftiest since April 2010. The Aussie reached a 4-1/2 year peak around 97.42 yen. The pound touched a 3-year high near 147.25 yen.
Yen selling resumed after Bank of Japan Governor Masaaki Shirakawa said he would step down on March 19, three weeks earlier than the official end of his five-year term, leaving at the same time as his two deputies, and raising the prospect that the next BOJ governor will more readily adopt the expansionist monetary policy demanded by Prime Minister Shinzo Abe.
"The Bank of Japan is about to get a lot more dovish, and sooner than previously thought," said Christopher Vecchio, a currency analyst at DailyFX.
Japan's benchmark Nikkei stock average soared 3.1 per cent to a 33-month high.
"I think the market could yet rise when they announce the new governor's name, particularly if it makes an asset purchase budget of 50 trillion yen ($535 billion) from the BOJ more likely," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley.
The 10-year JGB yield fell 1.5 basis points to 0.775 per cent after opening higher, at 0.800 per cent.
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