Asian markets lifted as Fed reassures on stimulus

HONG KONG (AFP) - Asian markets mostly rose on Friday after a US Federal Reserve official moved to soothe fears the bank would wind up its stimulus programme too soon.

Tokyo led the gains as the US dollar edged back towards the 100 yen mark, helped by a better-than-expected batch of economic data. Hong Kong and Shanghai were also supported by comments from the head of the People's Bank of China that it would "adjust" liquidity to ensure stability as financial markets suffer a credit squeeze.

Tokyo climbed 3.51 per cent to 13,677.32 and in the afternoon Hong Kong added 1.21 per cent, while Shanghai finished a tough week on a high, putting on 1.5 per cent to 1,979.21.

Seoul finished 1.56 per cent stronger, adding 28.62 points to 1,863.32, but Sydney was hit by late profit-taking to close 0.18 per cent, or 8.7 points, lower at 4,802.6.

The upbeat outlook comes at the end of a tough month for global markets after Fed chairman Ben Bernanke indicated the US central bank could start to reel in this year its US$85 billion (S$109 billion) a month bond-buying scheme, which keeps interest rates down.

Asia followed a rally on Wall Street, where investors welcomed comments from the Fed officials, including the bank's New York president William Dudley, who said "a rise in short-term rates is very likely to be a long way off".

Mr Dudley said the bank's policy deeply depends "on the progress we make towards our objectives" of pushing unemployment down to 6.5 per cent and getting the economy back up to strength.

"This means that the policy - including the pace of asset purchases - depends on the outlook rather than the calendar."

"If labour market conditions and the economy's growth momentum were to be less favourable than in the (policy committee's) outlook - and this is what has happened in recent years - I would expect that the asset purchases would continue at a higher pace for longer."