World stocks rise as yen strength shows signs of abating, hopes rise for Greece debt fix

BANGKOK - World stock markets rose Wednesday after Greece indicated a willingness to commit to spending cuts to secure its bailout and moves by Japan's central bank to support the economy lifted its powerhouse export sector.

Benchmark oil rose above $101 per barrel while the dollar fell against the euro and was steady against the yen.

European shares rose in early trading. Britain's FTSE 100 gained 0.2 per cent to 5,912.27 and Germany's DAX added 1.1 per cent to 6,799.65. France's CAC-40 gained 0.7 per cent to 3,399.91.

Wall Street was set to head higher, with Dow Jones industrial futures rising 0.4 per cent to 23,893 and S&P 500 futures adding 0.4 per cent to 1,353.30.

The gains followed strong advances in Asia. The Nikkei 225 index in Tokyo soared 2.3 per cent to close at 9,260.34, its highest close since Aug. 5. The surge comes a day after the Bank of Japan announced a further loosening of monetary policy through increased purchases of government bonds, raising hopes the yen's strength could abate.

South Korea's Kospi gained 1.1 per cent to 2,025.32. Hong Kong's Hang Seng jumped 2.1 per cent to 21,365.23, its highest finish since Aug. 4. Australia's S&P/ASX 200 index closed up 0.3 per cent at 4,253.40. Benchmarks in Singapore, Taiwan and Malaysia also rose while Indonesia and New Zealand fell.

Markets found hope in reports quoting Greek government officials as saying party leaders would promise by Wednesday to implement deep spending cuts and other reforms.

That came after talks to extricate Greece from a two-year debt crisis appeared to unravel late Tuesday after European finance chiefs cancelled a meeting to discuss a second international bailout for the country.

The meeting was called off after Athens failed to deliver on several demands made by its partners in the euro currency union. Greece needs a $171 billion (euro130 billion) bailout by March 20 to avoid a default that could rattle the world financial system.

The country has already passed some of the deep spending cuts its lenders were demanding but hasn't really satisfied anyone. Greeks have rioted, saying the cuts are too harsh, and Greece's neighbours have expressed concern that the cuts are not enough.

Greece also said its economy shrank drastically at the end of last year, and Europe is expected to report Wednesday that the economies of the 17 countries that use the euro shrank 0.4 per cent after growing 0.1 per cent the quarter before.

Late Monday, Moody's also downgraded its debt ratings on six European countries, including Italy, Portugal and Spain. Moody's also said it might cut France, Austria and the U.K. as well.

Japanese exporters rose sharply as the persistently strong yen showing signs of abating on the heels of the central bank's surprise announcement Tuesday. Mazda Motor Corp. jumped 8.3 per cent and Toyota Motor Corp. surged 4.7 per cent. Sony Corp. was 5.7 per cent higher. Nintendo Co. added 4.5 per cent.

But shares of Japanese computer chip maker Elpida Memory Inc. plunged 14.4 per cent, after the company said Tuesday that talks were not going well with other companies on investments, loans and partnerships to improve its dire financial conditions.

South Korean technology shares jumped. Samsung Electronics Co. added 5.1 per cent while Hynix Semiconductor Inc. gained 5.3 per cent.

Mainland Chinese shares advanced with the benchmark Shanghai Composite Index climbing 0.9 per cent to 2,366.70, its highest close this year. The Shenzhen Composite Index gained 1.5 per cent to 925.99.

A pledge by China's central bank governor, Zhou Xiaochuan, for China to continue investing in crisis-stricken Europe helped fuel the rally, said Peng Yunliang, an analyst based in Shanghai.

"Trading volume was about 30 per cent more than yesterday and investors expect the authorities to boost liquidity," he added.

Shenzhen-based Dongfang Electronics Co. and Gohigh Data Networks Technology Co. both hit the daily upside limit of 10 per cent on expectations that authorities will promote further development of the Internet as a national strategy.

Benchmark oil for March delivery was up 74 cents to $101.48 per barrel on the New York Mercantile Exchange. The contract fell 17 cents to finish at $100.74 per barrel on the Nymex on Tuesday.

In currency trading, the euro strengthened to $1.3158 from $1.3095 late Tuesday in New York. The dollar slipped slightly to 78.43 yen from 78.45 yen.