World stocks bounced back on Wednesday, driven by optimism about potential gains in the coming quarter and setting aside lingering concerns about Japan's nuclear crisis and turmoil in the Arab world.
Japan's yen dipped to a 10-month low against the euro and neared a three-week trough versus the dollar on expectations that interest rates will rise in Europe and the United States.
In recent days, several top U.S. central bank officials have said further bond purchases by the Federal Reserve are not needed to support the economy, while the European Central Bank is seen as all-but certain to raise rates in April.
MSCI's all-country world stock index was up 0.6 percent, taking its year-to-date gains to more than 3 percent. Emerging markets were up more than 1 percent.
This has occurred despite serious headwinds from political revolts in North Africa and the Middle East, and the economic fears stemming from Japan's triple disasters.
The two big geopolitical stories -- the aftermath of the earthquake in Japan and unrest in Libya -- remain vary much in play but with the backdrop not changing significantly on a day-by-day basis, it does seem as if markets are now keen to try and turn the page, said Ben Potter, an analyst at IG Markets.
Clearly there is still scope for significant developments here but there is little appetite around to speculate on these outcomes for now.
The pan-Europe FTSEurofirst 300 gained 0.9 percent.
It does not seem to want to go down despite everything that is thrown at it, said Andrea Williams of Royal London Asset Management.
Earlier, Japan's Nikkei average climbed 2.6 percent, hitting its highest level since suffering a post-quake panic sell-off.
On currency markets, the yen fell broadly, hitting 10-month lows against the euro and touching its lowest level in nearly three weeks versus the dollar as interest rate differentials widened in favor of U.S. and European currencies.
We've had comments from the Fed and a shift in sentiment toward the U.S. policy from a rate perspective that has really pushed U.S.-Japan yield differentials, driving the dollar higher, said Mitul Kotecha, head of global FX strategy at Credit Agricole in Hong Kong.
The dollar was up 0.1 percent against a basket of major currencies and gained 0.7 percent 83.05 yen.
The euro was down 0.2 percent at $1.4078.
German Bund futures opened lower, tracking losses in U.S. Treasuries after the Fed officials encouraged expectations of broadly tighter monetary policy.
Portuguese and Greek bonds also looked set to remain pressured after a new round of rating downgrades.
(Additional reporting by Natsuko Waki, Atul Prakash and Joanne Frearson; Editing by Catherine Evans)