(MENAFN- AFP) Japanese stocks led an Asia-wide rally Friday morning as dealers welcomed a report that the country's central bank is planning to ramp up its stimulus programme and after Europe's top banker hinted at similar moves.
After a rout that has wiped several trillion dollars off global markets so far this year, the prospect that two of the planet's biggest central banks were ready to step in finally gave investors something to cheer about.
On Thursday, European Central Bank boss Mario Draghi highlighted concerns about the impact of plunging equity and oil prices on already weak inflation and pledged to reconsider its monetary policy at its March policy meeting.
"We have the power, willingness and determination to act," he told a news conference. "There are no limits how far we are willing to deploy our policy instruments."
His comments lit a fire under European stocks and also gave strong support for Wall Street.
On Friday, Japan's Nikkei Asian Review reported that the head of the Bank of Japan, Haruhiko Kuroda, is weighing up his own plans to fend off the threat of deflation caused by the oil crisis.
The latest developments spread some much-needed confidence around trading floors, sending Tokyo shares surging 3.6 percent by the break.
Hong Kong was 2.5 percent higher, Shanghai gained 0.7 percent and Sydney added 1.3 percent, while there were also gains of more than one percent in Seoul, Taipei, Singapore and Manila.
- Cavalry -
"The cavalry might be coming to the rescue in terms of the central banks starting to sound more dovish," Shane Oliver, head of investment strategy in Sydney at AMP Capital Investors, told Bloomberg TV.
"There's a little bit of light at the end of the tunnel. We've probably seen the worst and by the end of the year things will be a lot brighter than they are now."
Oil prices also extended gains, having soared more than four percent on Thursday on the back of Draghi's comments and a report showing US inventories rose less than expected last week.
US benchmark West Texas Intermediate added 0.5 percent to $29.66 and Brent was up 0.9 percent at $29.50.
However, the two contracts continue to face heavy pressure from a supply glut, weak demand, overproduction and a slowdown in the global economy. Earlier this week, WTI fell below $27 at one point and Brent went sub-$28.
The positivity also seeped into currency markets as investors shifted out of assets considered safe havens.
The dollar slipped against most emerging market units, with the South Korean won up 0.7 percent, Indonesia's rupiah gaining 0.2 percent and the oil-dependent Malaysian ringgit up 0.9 percent.
And the dollar advanced against the yen, which is the go-to currency in times of turmoil and uncertainty. The greenback edged up to 117.81 yen -- having tumbled more than two percent against the Japanese unit this year.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: UP 3.6 percent at 16,592.89 (break)
Shanghai - Composite: UP 0.7 percent at 2,900.09
Hong Kong - Hang Seng: UP 2.4 percent at 18,981.80
Euro/dollar: DOWN at $1.0843 from $1.0878 Thursday
Dollar/yen: UP at 117.81 yen from 117.66 yen
New York - Dow: UP 0.7 percent at 15,882.68 (close)
London - FTSE 100: UP 1.8 percent at 5,773.79 (close)
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