Asian Stocks Climb as Japan Nominates Pro-Stimulus Central Bank Chief
By Prasanth Aby Thomas | February 28, 2013 3:47 PM EST
Asian markets extended gains in the morning as the Japanese government nominated a pro-stimulus candidate to head up the country's central bank and America's Federal Reserve reaffirmed its stimulus commitment.
The Nikkei traded 1.85 percent or 208.66 points higher to 11462.63 while South Korea's KOSPI was up 0.85 percent or 17.09 points to 2021.13. Australia's S&P/ASX 200 added 0.77 percent or 38.90 points to 5075.50.
In China, the Shanghai Composite Index rose 0.35 percent or 8.05 points to 2321.27. Hong Kong's Hang Seng gained 0.97 percent or 218.20 points to 22795.21.
The Japanese government has nominated Asian Development Bank chief Haruhiko Kuroda to replace Masaaki Shirakawa as the next governor of the Bank of Japan. Kuroda is well known as an advocate of aggressive economic stimulus measures, in line with Prime Minister Shinzo Abe's requirements.
Abe, who came to power in December with stimulus promises, was expected to come up with a central bank chief who would support his efforts to shore up Japan's ailing economy.
Japan's upper and lower houses will now vote on the matter which is expected to take place early March.
News of the nomination comes after official data showed that Japanese industrial output improved in January, underscoring speculations that the economy may be on the path to recovery. The data covers Abe's first full month as prime minister.
From a political perspective, such positive data may help Abe to silence his critics who have raised concerns on his aggressive stimulus measures.
The yen has returned to its downward spiral against the dollar after showing some strength early this week. The currency traded at 92.36 yen.
Wall Street had closed higher earlier, supported by improved US housing data and Bernanke's second testimony of the week. The central bank chief looked to downplay speculation that the policy committee members remained divided over the stimulus plan, suggesting that the quantitative easing policy had considerable support.
Following the tumultuous Italian election results, investors were worried over the country's bond auctions, which took place yesterday. However, to the markets' relief, the sales saw solid demand.
Exporter stocks traded higher in Tokyo. Electronics major Toshiba was up 4.68 percent while Yamaha Corp added 4.10 percent. Camera maker Canon added 3.40 percent.
Komatsu gained 4.79 percent after a Nikkei report said that the company could post improved full-year earnings.
Commodity shares gained in Hong Kong. Citic Pacific rose 4.87 percent while China Coal Energy Company added 4.37 percent, with China Shenshua Energy Company up 4.06 percent.
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