Asia stocks up on strong US corporate earnings

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News,Business

BANGKOK (AP) — Asian stock markets rose Wednesday after strong U.S. corporate earnings sent the Dow close to its record high. Japanese shares faltered, however, as the yen rebounded against the dollar.

Japan's benchmark Nikkei index tumbled as the yen strengthened against the dollar following a pledge by finance ministers from the world's major advanced economies to refrain from intentionally weakening their currencies. The Nikkei 225 was down 1.1 percent to 11,239.56.

Australian stocks hit their highest intraday level in nearly three years before ceding some gains. The S&P/ASX 200 was up 1 percent to 5,006.20 after the release of strong earnings from Commonwealth Bank of Australia and construction company Leighton Holdings.

South Korea's Kospi advanced 1.4 percent to 1,973.48. Benchmarks in Singapore, Indonesia and the Philippines also rose.

Markets in mainland China, Hong Kong, Taiwan and Vietnam were closed for Lunar New Year holidays.

Finance ministers from the Group of Seven nations said in a statement following a meeting in Brussels that they remained committed to exchange rates driven by the market, not government or central bank policies.

Traders interpreted the statement as a message directed at Japan, where the yen has plummeted against the dollar since Prime Minister Shinzo Abe took office and pushed the central bank for ultra-loose monetary policy.

Central bank governor Masaaki Shirakawa, who has appeared at odds with Abe's views on monetary policy, is resigning next month, giving the government an opportunity to find a successor more sympathetic to its aims.

Glenn Levine, senior economist at Moody's Analytics, said Japan's steps to boost its economy, including asset purchases by the Bank of Japan and raising the inflation target to 2 percent, offer promise but come with the risk of sparking a currency war.

He noted that the U.S. Federal Reserve and Bank of England have taken even more aggressive steps but have been "less vocal, and have thus avoided setting off currency alarms."

"Japanese Prime Minister Shinzo Abe merely vocalized what everyone already knew, that a cheaper currency is beneficial to growth," Levine said.

The Bank of Japan begins a two-day policy meeting Wednesday but analysts said no new initiatives were expected in light of the impending leadership change.

Among individual stocks, Commonwealth Bank of Australia rose 2.4 percent after reporting a record first-half profit of 3.66 billion Australian dollars ($3.76 billion) profit.

The Dow Jones industrial average rose to its highest close of the year after positive results from two big U.S. consumer brands, beauty products maker Avon and luxury clothing and accessories company Michael Kors. Consumer spending accounts for 70 percent of economic activity in the U.S.

The Dow rose 0.3 percent to 14,018.70, within 1 percent of its record of 14,164 it set in October 2007. The S&P 500 gained 0.2 percent to 1,519.43. The Nasdaq composite fell 0.2 percent to 3,186.49.

Benchmark oil for March delivery was up 8 cents to $97.59 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 48 cents to finish at $97.51 on the Nymex on Tuesday.

In currencies, the euro rose to $1.3449 from $1.3444 late Tuesday in New York. The dollar fell to 92.92 yen from 93.52 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

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