HONG KONG: Asian markets posted healthy gains on Wednesday as dealers followed a strong lead from Wall Street after Japan's easing of monetary policy led to hopes of a similar move in the United States.
Expectations that the US Federal Reserve will introduce its own measures sent the dollar back towards the 15-year lows against the yen while it also slipped further against the euro
Tokyo surged 1.29 per cent by the break, Hong Kong jumped 1.32 per cent, Sydney soared 1.59 per cent and Seoul was 0.98 per cent higher while Singapore rose 0.66 per cent.
The Bank of Japan on Tuesday cut interest rates to between zero and 0.1 per cent, from 0.1 per cent, and announced the creation of a 60-billion-dollar fund to buy government bonds and securities to help support the ailing economy.
The Fed, which has kept its own rates at zero to 0.25 per cent, has said it is ready to announce fresh measures to kickstart the recovery in the world's biggest economy.
Possible "quantitative easing in the US will be the big event for equities globally," City Index head of dealing Michael McCarthy said.
"If Friday's US jobs data are weak, I think the market will be relying on the (Federal Reserve chief Ben) Bernanke put option (further quantitative easing) and, if it shows strength, investors could also buy the market, so it's a win-win scenario."
Dealers are nervously keeping an eye on the release of jobs data out of the United States Friday, which will give a clue as to the state of the economy there.
On Wall Street the Dow soared 1.80 per cent, with sentiment also buoyed by better than expected output data from the service sector. The broader S&P 500 jumped 2.09 per cent and the tech-rich Nasdaq rallied 2.36 per cent.
Despite the BoJ's move -- and amid talk of possible Fed action -- the yen remained high against the greenback, sitting at 83.10 to the dollar, from 83.21 in New York late Tuesday. The dollar briefly dipped below 83 yen in New York.
The dollar was also at eight-month lows against the euro. The European single unit bought 1.3844 dollars in Tokyo morning trade, slightly up from 1.3834 dollars in New York, near its highest level since February.
The euro was edged down to 115.07 yen from 115.16.
The weak dollar was also a catalyst for gold to hit a record high 1,344.20 US dollars an ounce in morning trade in Hong Kong after opening at 1,339.00-1,340.00 dollars.
Christopher Gore, sales trader at GOMarkets in Melbourne said: "It's the general lack of faith in fiat currencies and a general cautious disposition that acts as a supporting factor for gold.
"The premise of further economic stimulus suggesting the Fed will need to water down the US currency and print more cash only exacerbates gold's march higher," he said, according to Dow Jones Newswires.
Analysts tipped markets to remain choppy through the weak as dealers look to Friday's jobs figures as well as earnings reports from PepsiCo and Alcoa that unofficially kick off the third-quarter earnings season.
On oil markets New York's main contract, light sweet crude for delivery in November, fell 15 cents to 82.67 dollars a barrel and Brent North Sea crude for November shed seven cents to 84.77 dollars.
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