Asian markets ended higher across the board Thursday, as risk appetite returned to the market after comments from the vice chairman of the Federal Reserve bolstered expectations for a U.S. interest rate cut.
Investors cheered after the U.S. central bank's second in command, Donald Kohn, signaled a willingness to lower borrowing costs further, saying financial market turmoil could slow the U.S. economy and the Fed had to be flexible.
The dollar steadied near a one-week high against the yen as Wall Street's rally restored investor confidence and prompted traders to drop the low-yielding Japanese currency.
Banks stocks, recently pounded by worries about credit losses, led the region's rebound with Australia's Macquarie Group and Japan's Mitsubishi UFJ both rising. Citigroup jumped over 7 percent in Tokyo, but National Australia Bank lagged, advancing just 0.7 percent as investors digested news that it planned to buy privately owned Great Western Bank for $707 million to expand its U.S. agribusiness banking.
Tokyo's Nikkei 225 Average hit a two-week closing high with a 2.4 percent gain, boosted by banks and exporters after the yen lost ground against the dollar and Wall Street rallied overnight. Honda Motor and Canon in particular helped lead the Nikkei higher.
South Korea's KOSPI gained 2.3 percent as local institutional investors chased beaten-down blue chips and chipmaker Hynix Semiconductor surged after a WTO ruling in its favor in a
Japanese tariff dispute.
Australian shares finished up 1.2 percent as U.S.-exposed firms such as Westfield Group gained on growing hopes of an interest rate cut in the U.S., while stronger base metal prices lifted miners.
Hong Kong blue chips ended up 4.1 percent in a broad rally after comments by a top Federal Reserve official lifted expectations of a December rate cut, sending many property shares up more than 5 percent. China Construction Bank stood up well after Temasek Holdings sold $255 million worth of shares in the mainland lender in the second big share sell-down in a Chinese bank this week by Singapore's state investment agency
Singapore's Straits Times Index surged 3.2 percent before the close on gains in financial stocks and in index heavyweight SingTel after U.S. stocks recorded their biggest percentage gain in four and a half years. DBS Group Holdings, United Overseas Bank and Singapore Exchange all rose sharply.
China's Shanghai Composite Index finished 4.2 percent higher in a technical rebound sparked by a surge in neighboring Hong Kong's stock market and led by large-capitalised stocks such as PetroChina.