Japan stocks up as BOJ signals continued stimulus
HONG KONG (AP) — Japanese stocks jumped on Friday as the central bank in Asia's second biggest economy signaled its lavish monetary stimulus could continue for longer than the two years anticipated by markets.
The benchmark Nikkei 225 index vaulted 3 percent to 14,880.76 after the Bank of Japan released minutes of its January policy meeting.
According to the minutes, board members said that in order to avoid any misunderstanding about the BOJ's program of ambitious monetary easing, the bank needed "to provide a clear explanation that it did not strictly set this to end in two years," according to Kyodo news agency.
As part of Prime Minister Shinzo Abe's economic revival strategy, the central bank in April last year announced a policy overhaul that aimed to double the money supply and achieve 2 percent inflation within about two years.
"They need to provide the market with confidence that they're going to continue doing things," said Andrew Sullivan, director of Asian sales trading at Kim Eng Securities. "We haven't really seen money being spent in Japan yet. Companies are still holding on to capex funds, they're not paying higher wages."
Benchmarks in most of the Asia notched up smaller gains after a strong expansion in U.S. manufacturing offset pessimism from a downbeat China factory report.
The private survey by Markit found U.S. factory activity this month grew at the fastest pace in nearly four years. The report helped investors shrug off earlier concerns about China after a separate report found manufacturing in the world's second-biggest economy contracted for a second straight month in February.
South Korea's Kospi gained 1.1 percent to 1,951.90. Hong Kong's Hang Seng added 0.4 percent to 22,486.15 and Australia's S&P/ASX 200 advanced 0.5 percent to 5,438.70.
However, worries about China's economy lingered among mainland Chinese investors. The Shanghai Composite Index dropped 1 percent to 2,118.13.
A moderate gain in the Conference Board's January index of leading indicators, suggesting continued economic expansion in the world's No. 1 economy in the first half, also helped shore up gains in major U.S. benchmarks.
The Standard & Poor's 500 rose 0.6 percent to 1,839.78 and the Dow Jones industrial average gained percent, to 16,133.23. The Nasdaq composite climbed 29.59 points, or 0.7 percent, to 4,267.55.
In energy trading, benchmark crude for April delivery was down 3 cents to $102.72 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 9 cents to $102.75 on Wednesday.
In currencies, the dollar edged higher to 102.50 yen from 102.48 yen in late trading on Thursday. The euro was little changed at $1.3719.