Japanese benchmark Nikkei rallied 1.73 percent or 152.58 points to 8959.96, Chinese Shanghai Composite rose 0.27 percent or 5.70 points to 2126.25 and Hong Kong's Hang Seng surged 1.10 percent or 218.22 points to 20,076.10 while South Korean KOSPI Composite climbed 1.56 percent and India's BSE Sensex gained 0.54 percent.
The German Constitutional Court will decide later Wednesday whether the country can legally participate in euro zone's permanent bailout fund known as the European Stability Mechanism, which gives loans to member states and may buy their bonds.
The court outcome could be potentially significant as a negative ruling would probably have serious consequences for the sovereign debt crisis. Without Germany’s 27 percent contribution, the ESM fund will not have the financial strength to back the ECB's bond-buying if markets turn against Spain and Italy in the coming months. However, most legal experts and market participants are expecting that the court will give the greenlight to ESM implementation, as well as to the new fiscal treaty.
Comments from Chinese Premier Wen Jiabao also added to the upward movement. Speaking at the World Economic Forum in Tianjin Tuesday, Wen Jiabao said that China is on track to meet the 7.5 percent growth target this year. He also indicated that the government would step up fiscal measures to support the economy, saying China has a budget surplus of around 1 trillion yuan and the government “will not hesitate to deploy for fine-tuning the world’s second largest economy."
“Wen comments signal further fiscal stimulus this year. We also believe that fiscal policy will play a more important role compared with monetary policy this year as it can shore up employment and lower the risk of hot money finding its way to the property market,” said a note from Credit Agricole.
Meanwhile, market participants also await the U.S. Federal Reserve's Federal Open Market Committee interest rate decision on Thursday. Following last week’s disappointing U.S. jobs data, the Fed is widely expected to announce further measures when it closes its two-day meeting.
Japanese stocks rallied, led by gains from exporter companies’ after data showed that machinery orders increased by 4.6 percent on a monthly basis in July after gaining 5.6 percent in the previous month, while analysts’ expected 2 percent monthly growth.
TDK Corp. climbed 6.62 percent and Citizen Holdings Co. surged 3.56 percent while Honda Motor Co Ltd. advanced 1.54 percent.
Energy sector and steel maker shares went up across the region. Inpex Corp. gained 2.36 percent and JFE Holdings Inc gained 3.90 percent in Tokyo while China Coal Energy Co. Ltd advanced 2.08 percent and Angang Steel Co. gained 2.48 percent in Hong Kong.
In Seoul, Daewoo Shipbuilding & Marine Engineering Co. Ltd. rose 2.41 percent and Hyundai Heavy Industries Co. Ltd surged 3.38 percent while Samsung Electronics Co. Ltd. rose 3.03 percent.