Asian stocks extended their new year's rally Wednesday, with Japan's index up nearly 2 percent, on hopes that stimulus measures from a new U.S. administration would help speed the world's economic recovery.
The yen continued to lose ground against the dollar, buoying shares in exporters, and crude oil prices were steady after briefly touching above $50 a barrel overnight, their highest point since Dec. 1.
Since falling to multiyear lows in November, global equities have advanced strongly, with a number of major benchmarks up more than 10 percent. Markets have shown few signs of slowing in recent days, as investors poured money back into riskier assets, such as emerging market stocks, amid speculation that government policies will help bring an end to the global slump later this year.
Most recently, buying sentiment has been supported by U.S. President-elect Barack Obama's proposals to revive the world's largest economy with spending and tax measures that could cost as much as $775 billion.
But with company earnings expected to be dire in the next several months, the "Obama effect" could be short-lived, said Peter Lai, investment manager at DBS Vickers in Hong Kong.
"After the honeymoon period of Obama wears off, people will realize the cruel reality of the economic slowdown and the credit crisis," Lai said.
Tokyo's Nikkei 225 stock average rose 168.79 points, or 1.9 percent, to 9,249.63, while South Korea's Kospi added 1.8 percent to 1,215.28.
Benchmarks in Australia, Taiwan, Singapore, the Philippines and Maylasia were higher by about 1 percent or more; stock measures in Hong Kong and Shanghai were slightly lower.
Also buoying the region were overnight gains on Wall Street, where the Dow Jones industrial average rose 62.21, or 0.7 percent, to 9,015.10.
Broader stock indicators showed steeper advances to end at their highest levels since Nov. 5. The Standard & Poor's 500 index rose 7.25, or 0.8 percent, to 934.70. The Nasdaq composite index advanced 24.35, or 1.5 percent, to 1,652.38.
U.S. futures eased modestly, pointing to a soft open on Wall Street.
Oil prices were steady, with light, sweet crude for February delivery down 5 cents at $48.53 a barrel in Asian trade. Overnight, the contract fell 23 cents to settle at $48.58 a barrel after prices at one point reached $50.47.
In currencies, the dollar rose 0.4 percent to 93.75 yen, and the euro traded up 0.14 percent at $1.3517.
