Asian stocks rose on Thursday, with investors seeing a sliver of hope the U.S. economy has bottomed, while the euro edged up before a European Central Bank meeting at which rates may be cut for the last time in a while.
Honda Motor Co <7267.T> shares climbed 9 percent and Hyundai Motor <005380.KS> was up 5 percent, as hopes continued that General Motors
That combined with a pickup in new orders according to a U.S. survey of manufacturing activity and the highest volume of home loan applications since mid January supported a view that the worst for the global economy may have passed.
However, reports showing the world's biggest economy continued heavily to bleed jobs in the last few months tempered optimism about when consumer demand for Asia's exports would recover, keeping gains in commodities contained.
Furthermore, leaders at a G20 summit were divided on the need for more stimulus to support efforts underway already.
Such lack of consistency among asset classes reflects conflicting inputs, said Dariusz Kowalczyk, chief investment strategist with SJS Markets in Hong Kong.
U.S. data continues to come in better than anticipated. On the other hand, uncertainty continues over the fate of U.S. automakers, and signs of discord between G20 leaders are deepening, he said in a note.
Japan's Nikkei share average <.N225> rose 3 percent. Rolling 20-day returns of 18 percent on the Nikkei outpaced the 14 percent on the MSCI all-country world index <.MIWD00000PUS>.
Shares of Mitsubishi UFJ Financial Group <8306.T>, Japan's top bank, were up 5 percent and one of the strongest supports to the Nikkei.
The MSCI index of Asia Pacific stocks outside Japan <.MIAPJ0000PUS> was up 3.6 percent, gaining for a third day. Financials and the materials sectors were the biggest boosts to the index.
Bank stocks were underpinned ahead of expected approval later on Thursday of relaxing some U.S. accounting standards, which could lead to a bump in banks' bottom lines.
Hong Kong's Hang Seng index <.HSI> jumped 4 percent, with HSBC stock <0005.HK> leading the gauge up nearly 7 percent.
WAITING FOR THE ECB
The euro inched up in quiet trade, though dealers were mainly waiting for the outcome of an European Central Bank meeting, expecting the benchmark rate to be cut to a record low 1 percent.
Investors also wanted to see to what extent ECB policymakers were willing to dive into quantitative easing -- vast expansion of a central bank's balance sheet to support growth -- after the Bank of England and the Federal Reserve already embarked down that road.
The markets are pretty much in limbo ahead of the G20 and the ECB. So I wouldn't expect much in the way of volatile moves ahead of them, said Sue Trinh, senior currency strategist at RBC Capital Markets in Sydney.
The euro was at $1.3275, up around 0.2 percent from late New York, though near Monday's two-week low of $1.3113. The euro was up 0.4 percent to 131.11 yen, but sellers have prevented it from advancing above 132 yen for the last few days.
The Australian dollar continued to draw support from rallying global equity markets and hopes demand for raw materials will slowly return. The currency was up 0.6 percent to US$0.7035, closing in on last week's two-month high above $0.7090.
U.S. crude futures rose 1.3 percent to just above $49 a barrel as further supply cuts by OPEC in March offset U.S. data showing a higher-than-expected rise in crude stocks.
Government bond markets continued to be ruled by supply concerns. The yield on the 10-year Japanese government bond briefly touched a 3-1/2-month high after the Ministry of Finance disappointed some investors by setting a lower-than-anticipated coupon for an upcoming auction.
U.S. Treasuries were under modest pressure as stock markets climbed, after longer-maturity bonds rose overnight on the Fed's bond buyback schedule.
The 10-year yield edged up to 2.68 percent from 2.65 percent on Wednesday.