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Japanese stocks jump after central bank's signals no need to end stimulus plan within 2 years

HONG KONG - Japanese stocks jumped on Friday as the central bank in Asia's second biggest economy signalled its lavish monetary stimulus could continue for longer than the two years anticipated by markets.

The benchmark Nikkei 225 index closed 2.9 per cent higher at 14,865.67 after the Bank of Japan released minutes of its January policy meeting. Board members said that in order to avoid any misunderstanding about the BOJ's program of ambitious monetary easing, the bank needed "to provide a clear explanation that it did not strictly set this to end in two years," according to Kyodo news agency.

As part of Prime Minister Shinzo Abe's economic revival strategy, the central bank in April last year announced a policy overhaul that aimed to double the money supply and achieve 2 per cent inflation within about two years.

"They need to provide the market with confidence that they're going to continue doing things," said Andrew Sullivan, director of Asian sales trading at Kim Eng Securities. "We haven't really seen money being spent in Japan yet. Companies are still holding on to capex funds, they're not paying higher wages."

Most major global benchmarks notched up smaller gains after a strong expansion in U.S. manufacturing offset pessimism from a downbeat China factory report.

The private survey by Markit found U.S. factory activity this month grew at the fastest pace in nearly four years. The report helped investors shrug off earlier concerns about China after a separate report found manufacturing in the world's second-biggest economy contracted for a second straight month in February.

Britain's FTSE 100 rose 0.4 per cent to 6,843.30 and Germany's DAX climbed 0.1 per cent to 9,630.43. France's CAC 40 added 0.1 per cent to 4,359.37.

U.S. stocks were poised to rise. Dow futures were up 0.2 per cent to 16,128.00 and broader S&P futures gained 0.1 per cent to 1,838.50.

Asian markets ended mostly higher, with South Korea's Kospi gaining 1.4 per cent to close at 1,957.83. Hong Kong's Hang Seng added 0.8 per cent to 22,568.24 and Australia's S&P/ASX 200 advanced 0.5 per cent to 5,438.70.

The Shanghai Composite Index dropped 1.2 per cent to 2,113.69. China's tightly controlled yuan has been steadily strengthening in recent years but this week is down about 0.4 per cent, according to FactSet data, as the factory survey intensified concerns about China's economy.

In energy trading, benchmark crude for April delivery was down 9 cents to $102.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 9 cents to $102.75 on Wednesday.

In currencies, the dollar edged lower to 102.37 yen from 102.48 yen in late trading on Thursday. The euro fell to $1.3710.

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