Asia stocks rise on hopes for U.S. stimulus; Nikkei up 1.11%

Investing.com - Asian stocks rose on Thursday on hopes that the Federal Reserve will announce plans to stimulate the U.S. economy via monetary easing tools, which normally send the dollar weakening and global stocks climbing.

During Asian trading on Thursday, Hong Kong's Hang Seng Index was up 1.51%, Australia's S&P/ASX200 was up 1.65%, while Japan’s Nikkei 225 Index was up 1.11%.

Federal Reserve Chairman Ben Bernanke is due to appear before Congress later Thursday and markets were hoping he'll provide some signs that U.S. monetary policy authorities will favor stimulating the economy via easing measures.

Since the downturn, the Fed has acquired USD2.3 trillion in assets from banks, pumping the economy full of growth-fueling liquidity in the process.

The Federal Reserve has also shuffled its portfolio of Treasury holdings by selling shorter-term instruments and stocking up on longer-dated debt to keep long-term interest rates low, yet labor markets remain weak.

In May, the U.S. economy added a dismal 69,000 nonfarm payrolls, far below market calls for a gain of 150,000 net jobs.

The Federal Open Market Committee (FOMC) will meet next week, and hopes are building board members will favor stimulus, yet some senior Fed officials are already hinting at a need for Fed intervention due to a weak economy at home and an intensifying European debt crisis abroad.

"There are a number of significant downside risks to the economic outlook, and hence it may well be appropriate to insure against adverse shocks that could push the economy into territory where a self-reinforcing downward spiral of economic weakness would be difficult to arrest," yes Federal Reserve Vice Chair Janet Yellen said in prepared remarks delivered at the Boston Economic Club Dinner, Boston, Massachusetts.

"Some have expressed concern that a substantial further expansion of the balance sheet could interfere with the Fed's ability to execute a smooth exit from its accommodative policies at the appropriate time. I disagree with this view," Yellen added.

"The FOMC has tested a variety of tools to ensure that we will be able to raise short-term interest rates when needed while gradually returning the portfolio to a more normal size and composition."

Meanwhile, European Central Bank President Mario Draghi said downside risks still threaten the European economy, though he stopped short of announcing new long-term refinancing operations designed to ease credit conditions in Europe after a current program ends.

While Draghi said the European Central Bank will act if needed, rates remain unchanged at 1.00%.

In Hong Kong, top gainers included COSCO Pacific, up 4.11%, China Overseas, up 3.51%, and Wharf Holdings, up 3.36%.

In Australia, top gainers included Aquarius Platinum, up 9.90%, art Energy, up 6.49%, and Kareoon Gas Australia, also up 5.28%.

European stock futures indicated a higher opening.

France's CAC 40 futures pointed to a gain of 0.36%, while Germany's DAX 30 futures signaled a gain of 0.43%. Meanwhile, in the U.K., the FTSE 100 futures indicated a gain of 0.32%.

Dow Jones Industrial Average futures were up 0.27% while the S&P 500 futures were up 0.32%.
Later Thursday, the Bank of England will announce its decision on benchmark interest rate.

The U.K. will also release data on service sector activity and industry data on retail sales.

On Thursday, the U.S. is to release government data on initial unemployment claims, while Fed Chairman Ben Bernanke is to appear before the Joint Economic Committee, in Washington.