Asian markets up on hopes for Fed stimulus

HONG KONG: Asian markets climbed Wednesday on hopes for a fresh stimulus drive by the US Federal Reserve to kick-start its economy while G20 leaders pledged to "restore confidence" in the world economy.

European heads at the G20 summit in Mexico also vowed to begin looking at a region-wide banking union as they attempted to soothe investor concerns over the debt-riddled eurozone.

Tokyo rose 0.77 percent by the break, Hong Kong was 0.50 percent higher, Sydney added 0.55 percent, Seoul gained 0.31 percent and Shanghai was flat.

Eyes are on Washington, where the Fed will wrap up a two-day meeting that many expect to end with a fresh injection of capital to shore up the sputtering economic recovery as jobs growth slows.

Some economists say policymakers could use a third round of asset purchases known as quantitative easing (QE3) or use other tools at their disposal.

"Hopes for more easing are certainly a factor stoking enthusiasm for equities globally," Tatsunori Kawai, chief strategist at kabu.com Securities, told Dow Jones Newswires.

"But conversely, the resulting pressure on the dollar may end up holding yen weakening -- a critical consideration for Japan exporter shares -- at bay."

In early Asian trade, the dollar was quoted at 79.06 yen, slightly up from 78.89 yen in New York late Tuesday.

On Wall Street the Dow rose 0.75 percent, the S&P 500 climbed 0.98 percent and the Nasdaq added 1.19 percent.

In the Mexican resort of Los Cabos, European leaders scrambled to buy themselves time in the battle to save the eurozone, promising their G20 partners they would integrate their banking sector and restart growth.

In a joint communique the heads of the 20 biggest developed and developing economies pledged to "take the necessary actions to strengthen global growth and restore confidence."

And the heads of Europe's major economies agreed "to consider concrete steps towards a more integrated financial architecture, encompassing banking supervision, resolution and recapitalisation, and deposit insurance."

The leaders said eurozone members will "take all necessary measures" to stabilise the single currency, including moves to break the loop that has weak governments piling on more and more debt to bail out their banks.