Asian shares mostly up as China growth beats forecasts

HONG KONG (AFP) - Asian markets mostly rose on Wednesday following a second straight rally on Wall Street, while Chinese economic growth came in slightly above forecasts in the first three months of the year.

Japan's Nikkei led regional gains thanks to a weaker yen after the head of the country's central bank said it was on target to meet its inflation target next year.

Tokyo jumped 2.26 per cent by the break, Hong Kong added 0.51 per cent and Sydney gained 0.36 per cent. Seoul was 0.10 per cent higher but Shanghai was down 0.23 per cent.

China's National Bureau of Statistics (NBS) said the world's number two economy expanded 7.4 per cent year on year in January-March.

The figure was lower than the 7.7 per cent seen in the final three months of last year and marks the fourth slowdown in the past five quarters, putting China on track for its worst annual performance since 1990.

However, it was slightly up on the 7.3 per cent median forecast in a survey of 13 economists by AFP.

The NBS spokesman Sheng Laiyun said in a statement the economy "performed within a proper range, with structural adjustment, economic transformation and upgrading continuing to make progress".

But he added: "We should keep in mind that the external environment remains complicated and volatile, and the national economy still faces downward pressure."

There are increasing fears of a slowdown in the Chinese economy, a key driver of regional and global growth, following a string of weak data, including on manufacturing and trade.

That in turn has fuelled speculation Beijing will announce some measures to kickstart growth, such as by lowering that amount of cash banks must keep in reserve, which would boost lending.

Mark McFarland, global chief economist at Coutts Private Bank, told Dow Jones Newswires that while Wednesday's data was weak "under the circumstances, it actually isn't bad". He added that markets should forget about stimulus for now as China focuses on reining in credit growth.