Asia shares rally as Fed nominee backs stimulus

HONG KONG - Asian markets rallied for a second day Friday after the woman tipped to take over as Federal Reserve chief indicated she would maintain its stimulus programme for as long as needed.

The dollar was also at two-month highs above 100 yen, helped by weak growth data out of Japan and the eurozone.

Tokyo jumped 1.95 per cent, or 289.51 points, to a six-month high of 15,165.92, while Sydney added 0.86 per cent, or 43.6 points, to end at 5,401.7 and Seoul put on 1.94 per cent, or 38.08 points, to close at 2,005.64.

Shanghai surged 1.68 per cent, or 35.32 points, to 2,135.83 on speculation that Beijing will announce a plan to revamp the country's vast state sector.

The index had tumbled earlier this week after a much-anticipated reform plan by China's leaders lacked any detail.

Hong Kong was 1.69 per cent higher, adding 383.00 points, at 23,032.15. Mumbai was closed for a public holiday.

Janet Yellen told her Senate hearing Thursday she would not consider ending the Fed's bond-buying scheme as long as growth remained tepid and unemployment elevated.

"I consider it imperative to do what we can to promote a very strong recovery," Yellen, President Barack Obama's pick to lead the Fed, told the Senate Banking Committee.

The news sent Wall Street into another rally. The Dow climbed 0.35 per cent while the S&P 500 rose 0.48 per cent, both hitting record highs again. The Nasdaq added 0.18 per cent.

Global shares had climbed on Thursday after the release of Yellen's prepared statements that highlighted her support for the scheme.

She gave no hint of when she would wind down the US$85 billion-a-month scheme, saying - like current chairman Ben Bernanke - everything was data-driven and that current data suggested the economy still required Fed support.

Her comments will come as some relief to emerging economies, which have been in turmoil in recent months owing to uncertainty about the future of the stimulus, which has been credited with a global investment splurge.

Despite expectations the Fed will continue pumping billions of dollars into financial systems, the greenback broke 100 yen in New York, and extended those gains in Asia Friday, following soft growth data out of Japan and Europe.

Tokyo said Thursday economic growth fell to 1.9 per cent in the July-September quarter as exports weakened and consumer spending slowed. The economy expanded 3.8 per cent in the previous three months.

And the Eurostat statistics agency said the eurozone grew just 0.1 per cent in the third quarter - compared with 0.3 per cent in April-June - with Germany off its stride and France hit by a surprise contraction.

In afternoon Tokyo trade the dollar bought 100.26 yen compared with 100.00 yen in New York and its highest level since early September.

The euro fetched $1.3449 and 134.86 yen compared with $1.3459 and 134.61 yen.

On oil markets New York's main contract, West Texas Intermediate for December delivery, was up 19 cents to $93.76 a barrel in Asian trade, while Brent North Sea crude for December eased 34 cents to $108.18.

Gold fetched $1,282.81 per ounce at 0800 GMT compared with $1,283.06 on Thursday.

In other markets:

- Taipei rose 0.52 per cent, or 42.11 points, to 8,177.12. Smartphone maker HTC fell 0.98 per cent to Tw$152.0 while Taiwan Semiconductor Manufacturing Co. was 0.48 per cent higher at Tw$104.0.

- Manila rose 0.29 per cent, or 18.52 points, to 6,346.40.

- Wellington fell 0.27 per cent, or 13.10 points, to 4,914.08.

Retailer Hallenstein Glasson slumped 10.0 per cent to NZ$4.50 after a profit warning while market heavyweight Fletcher Building was off 1.75 per cent at NZ$9.53.

- Bangkok rose 0.35 per cent or 4.97 points to close at 1,420.66.

Coal producer Banpu shed 0.90 per cent to 27.50 baht, but PTT Plc gained 0.65 per cent to 310.00 baht.

- Kuala Lumpur rose 5.67 points, or 0.32 per cent, to close at 1,789.87.

Malayan Banking added 0.72 per cent to 9.77 ringgit, Public Bank gained 0.11 per cent to 18.18 while AMMB Holdings lost 1.36 per cent to 7.25 ringgit.

- Singapore closed up 0.32 per cent, or 10.19 points, at 3,201.27.

Singapore Airlines rose 0.19 per cent to S$10.33 while Jardine Cycle and Carriage was up 0.61 per cent to S$34.42.

- Jakarta ended down 0.73 per cent, or 31.92 points, at 4,335.45.

Hero Supermarket lost 0.76 per cent at 3,250 rupiah, while Indofood Sukses Makmur gained 0.76 per cent to 6,600 rupiah.