Asian markets rose strongly Wednesday, tracking gains on Wall Street, led by financial stocks amid some easing concerns about the global credit crisis.
Japan's benchmark stock index rose to a seven-week high while Hong Kong's Hang Seng index jumped 3.24 percent.
Investors were encouraged by news of IBM Corp.'s US$15 billion (euro10 billion) stock buyback plan and that Moody's Investors Service affirmed top-notch credit ratings for U.S. bond insurer MBIA Inc., reducing worries about further writedowns in the sector.
Traders in Asian will be paying close attention to whether U.S. Federal Reserve Chairman Ben Bernanke will focus on downside risks to economic growth or suggests further rate cuts during his testimony to Congress Wednesday and Thursday.
Tokyo's benchmark Nikkei 225 index rose 206.58 points, or 1.49 percent, to close at 14,031.30, its highest since Jan. 11.
"The Nikkei will probably start factoring in a Fed rate cut of 50 basis point in March," said Tsuyoshi Segawa, equity strategist at Shinko Securities in Tokyo.
Japanese insurers and banks gained. Millea Holdings added 1.5 percent and Mizuho Financial Group climbed 3.3 percent.
Technology shares like Sony Corp. and TDK Corp. also rallied on news of the IBM buyback plan, which helped the Dow Jones industrial average rise 0.9 percent Tuesday to 12,684.92.
Hong Kong stocks were lifted by banking giant HSBC and Chinese financial companies after Standard Chartered Bank posted better-than-expected results late Tuesday. The Hang Seng Index rose 769.09 points to 24,483.84.
"Standard Chartered Bank's results showed smaller-than-expected damage from the credit market turmoil. This bodes well for HSBC and other banking stocks," said Francis Lun, a manager at Fulbright Securities Ltd. in Hong Kong.
HSBC led the blue chips, rising 3.3 percent.
The Hong Kong market also gained on optimism about the local economy after Financial Secretary John Tsang handed out billions of dollars in tax cuts and other relief measures in his first budget speech Wednesday.
Henderson Land rose 4.2 percent and Cheung Kong ended 3.5 percent higher.
Chinese financial companies also gained on bargain hunting after recent declines on liquidity concerns in China. Ping An Insurance shot up 8.2 percent, while China Life Insurance was up 6.1 percent.
Australia's stocks market had its third straight gain on buoyant commodity prices and further gains on Wall Street. The benchmark S&P/ASX 200 rose 101.8 points, or 1.8 percent, to 5,767.2.
Gains were broad-based, with the heavyweight banking and resources sectors making the biggest positive contribution. BHP Billiton rose 2.8 percent, Rio Tinto climbed 1.9 percent and National Australia Bank rose 4.1 percent.
But while there was some hope of further gains in the short term, some traders remained bearish.
"There has been a lot of short covering going on and there's probably a bit to go in banks," said ABN Amro's head of Sydney sales trading Justin Gallagher. "But I'm not convinced that much has really changed offshore."
In mainland China, investors bought up stocks that had been beaten down in recent weeks. The benchmark Shanghai Composite Index rose 2.3 percent, or 95.86 points, to 4,334.04. The Shenzhen Composite Index rose 2.5 percent to 1,355.31.
Earlier this week, the China Securities Regulatory Commission urged companies to think carefully when planning share offerings, after the benchmark index fell to a seven-month low on concerns over a potential liquidity crunch.
Analysts said a report in the state-run Shanghai Securities News Wednesday that another eight Chinese mutual funds have been given regulatory approval to offer private wealth management services also helped boost investor confidence.
Financial companies, among the worst performers over the past week, led the market higher. China Merchants Bank, which dropped nearly 10 percent last week, gained 4.9 percent.
Elsewhere, Singapore's Straits Times index rose 0.5 percent to 3,094.45, while South Korea's Kospi rose 0.7 percent to 1,720, a six-week high.
In currency trading, the euro rose above US$1.50 for the first time, climbing as high as US$1.5087. The dollar fell to 107.04 yen at midafternoon in Tokyo, down from 107.26 yen late Tuesday in New York.