HONG KONG (AP) - Asian stock markets soared Monday ahead of a U.S. announcement to purge as much as $1 trillion in toxic bank assets and as Japan signaled more stimulus measures to resuscitate the world’s second-largest economy.
Tokyo shares led the region’s gains, with the country’s benchmark hitting a six-week high, after Japan’s finance minister said aggressive public spending to the tune 20 trillion yen ($208 billion) might be needed to end the country’s painful recession.
Investors also were eyeing the U.S., where the Obama administration is set to unveil Monday its latest effort to heal the hard-hit financial sector and restore bank and consumer lending. The governmesnt is expected to create a new government entity, the Public-Private Investment Program, to clear from bank balance sheets up to $1 trillion in souring securities and loans at the root of the current crisis.
The initiative, which seeks to enlist private investors by offering billions of dollars in low-interest loans and sharing certain risks, was just the latest in an unprecedented effort by major governments to stem the worst global downturn in decades. It helped re-energize a global rally that started two weeks ago amid easing fears about the financial system.
“It’s becoming difficult to remain bearish,” said Desmond Tjiang, chief investment officer, who helps manage $3 billion in Asian equities at Fortis Investment Management in Hong Kong. “The governments have definitely helped … and people are still hoping for a second-half recovery.”
In Japan, the Nikkei 225 stock average advanced 269.57 points, or 3.4 percent, to 8,215.53, with the weakening yen further boosting sentiment. Hong Kong’s Hang Seng jumped 543.38, or 4.2 percent, 13,376.84, and South Korea’s Kospi climbed 2.4 percent to 1,199.50.
Shanghai’s key index added 2 percent. Australia’s benchmark was up 2.4 percent, while Indian and Taiwan stock measures gained advanced over 3 percent.
Banks were especially strong across the region, with Japanese mega bank Mitsubishi UFJ Financial Group jumping 4.7 percent and China Construction Bank surging 5.3 percent in Hong Kong.
Friday in New York, Wall Street’s took breather without any significant news to reinforce its recent rally. The Dow Jones industrial average fell 122.42, or 1.7 percent, to 7,278.38. Broader stock indicators also lost ground, with the Standard & Poor’s 500 off 15.50, or 2 percent, to 768.54.
U.S. futures were boosted by Monday’s pending announcement about the government’s bank plan. Dow futures were up 43 points, or 0.6 percent, to 7,454, while S&P 500 futures were up 17 points, or 2.2 percent, to 781.1.
Oil prices were higher in Asian trade, with benchmark crude for May delivery up 72 cents at $52.79 a barrel.
In currencies, the dollar strengthened to 96.19 yen from 95.95 yen late Friday. The euro was higher at $1.3667 from $1.3582.