SINGAPORE: Technology stocks pushed Asian shares to a two-month high on Wednesday, powered by hopes of strong earnings for Intel, while the yen faltered after the Bank of Japan loosened policy in a bid to spur the flagging economy. The yen reversed direction and fell against the dollar and euro after the Bank of Japan doubled the amount of low-cost money it was making available to banks to encourage them to write more loans. Commodity-linked currencies such as Australian dollar gained against the US dollar. "Major central banks have indicated they would refrain from tightening policy in the near term, which should support risk assets," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ. The MSCI index of Asian shares excluding Japan jumped about 2 per cent to its highest in two months, tracking US shares which hit a 17-month high. Shares of Intel jumped 4 per cent to their highest in more than a year on expectations that robust Asian sales and a rebound in corporate spending will help the chipmaker beat current-quarter earnings estimates. Japan's Nikkei average rose more than a per cent, hitting an eight-week closing high, after the BOJ eased policy in a move seen by many as an attempt to prevent the yen from rising and as chip shares gained on hopes of positive earnings outlook from Intel. Chip equipment maker Tokyo Electron, Advantest, which supplies chip testers to chip makers such as Intel, and Elpida Memory, the No.1 Japanese maker of DRAM chips, all climbed more than a per cent. Shares in Hong Kong and Shanghai surged nearly 2 per cent as investors cheered the US Federal Reserve's pledge to keep rates near zero for a prolonged period. The Fed essentially presented equity investors with the best of all worlds, saying it was keeping interest rates near zero and would do so for an extended period, but also pointing to increased momentum in the US economy. In Hong Kong, banks and local developers received a boost from the low-rate scenario, helping the key index to snap out of a three-day decline to close at the highest in more than eight weeks. "We have a very strong recovery because the US indicated that there will be a long period before they will consider raising rates," said Peter So, strategist at CCB International. "So the market is more comfortable to further accumulate shares at lower levels." "Some companies have released impressive earnings figures. The market sees some possible upside in the earnings, so people are now buying ahead of the good news," So added. Australian stocks rallied 1.2 per cent to nearly a two-month high, after the Fed's pledge on interest rates encouraged a return to riskier assets and boosted resource firms. Global miners posted solid rises, with BHP Billiton and Rio Tinto gaining more than a per cent. IG Markets analyst Cameron Peacock said appetite for resources stocks should continue despite speculation that investors would switch out of materials and into financial firms ahead of the bank reporting season. "Upgrades to commodity prices, an abating of European debt concerns, and a still robust economic performance out of China should maintain a base level of risk appetite to support the materials sector," Peacock said. South Korean shares jumped more than 2 per cent, led by technology issues and the most foreign buying in four months fuelling upward momentum. Korea Life Insurance Co shares closed up 8 per cent in heavy trading on their debut, signalling keen demand ahead of bigger rival Samsung Life's planned $4 billion IPO in May. Taiwan stocks rose 2 per cent as gains on Wall Street fuelled buying in technology exporters including AU Optronics that are riding on growing demand for new computers and other consumer gadgets. Shares in India and Singapore rose more than half a per cent. Oil extended gains to above $82 a barrel, rising to within $2 of this year's high, as Saudi Arabia's Oil Minister described prices as "beautiful" at OPEC's production meeting in Vienna. Gold rose to its highest in more than a week as the Fed's decision to hold interest rates unchanged hit the dollar and burnished the metal's investment appeal. "Some investors have pushed up the gold price because of weak dollar. I think sentiment is still flat. It's not really too bullish," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. "We don't know when the Chinese are going to increase the interest rates. I think people are pretty cautious. Gold will go up by another $10 or $20 and then backtrack," he added.

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