Asian stocks gain on possibility of economic stimulus

Asian stocks climbed as global policymakers signaled they may take steps to stimulate economic growth.

BHP Billiton Ltd, the world's largest mining company, advanced 1.5 percent in Sydney as Australian employment unexpectedly rose in May, driven by hiring amid the nation's minerals boom.

Mitsubishi Corp, the No 1 Japanese trading house, rose 1.2 percent and Komatsu Ltd, a mining-equipment maker, gained 2.1 percent in Tokyo as investors bought shares of companies with profits closely tied to economic growth.

"Any time central bankers give us a promise that they're going to inject some more liquidity into the markets, risk assets start to rally, and that's precisely what's happened," said Arjuna Mahendran, Singapore-based head of Asia investment strategy at HSBC Private Bank, which manages about $556 billion. "We could have a risk rally going on for a while."

Japan's Nikkei 225 climbed 1.2 percent, and South Korea's Kospi Index advanced 2.6 percent as it resumed after a holiday on Wednesday. Hong Kong's Hang Seng rose 0.9 percent. The Shanghai Composite Index slid 0.7 percent.

Australian boom

Australia's S&P/ASX 200 Index jumped 1.3 percent after a government report showed employers added 38,900 jobs last month. Economists had forecast no change.

The employment report came a day after data showed Australia's economy expanded twice as fast as economists had forecast in the first quarter as resource investment surged.

Federal Reserve Vice-Chairman Janet Yellen said slowing job growth and deteriorating financial-market conditions show the US economy "remains vulnerable to setbacks" and may warrant additional monetary stimulus.

Dennis Lockhart, presidenf of the Federal Reserve Bank of Atlanta, said extending Operation Twist, the central bank's stimulus program that lengthens maturities of debt on its balance sheet, is an "option on the table".

Premier Wen Jiabao vowed last month to work more to increase growth after trade and domestic demand were below forecasts in April.

European Central Bank President Mario Draghi said policymakers discussed cutting interest rates on Wednesday and officials stand ready to act as the eurozone's growth outlook worsens.

"The Chinese will take action to stimulate the economy and the Americans will similarly respond with an extension of Operation Twist or more quantitative easing," said Prasad Patkar, who helps manage about $1 billion at Platypus Asset Management Ltd in Sydney. "For a sustained rally, we need a period of stability where we're not in a fire-fighting-crisis mode."

Exports, energy

Export-related companies in Japan rose after the yen weakened, boosting overseas earnings prospects. Mitsubishi Corp gained 1.2 percent to 1,552 yen ($19.54) and Komatsu advanced 2.1 percent to 1,884 yen. Sony Corp, Japan's No 1 exporter of consumer electronics, jumped 2 percent to 1,072 yen. Canon Inc, a Japanese camera maker that gets about 80 percent of its revenue outside Japan, gained 3.4 percent to 3,185 yen.

Inpex Corp, Japan's top energy explorer, advanced 3.3 percent to 454,000 yen as oil climbed for a fourth day. CNOOC Ltd, China's biggest offshore oil producer, gained 1.9 percent to HK$14.04 ($1.80).

Oil for July delivery increased 8 cents to $85.10 a barrel in electronic trading on the New York Mercantile Exchange at 4:04 pm in Sydney.

BHP Billiton advanced 1.5 percent to A$31.58 ($31.36). Rio Tinto Group, the world's third-largest mining company, gained 2.2 percent to A$55.42.

Posco, the world's third-biggest steelmaker by output, rose 2.1 percent to 365,000 won ($311.55) in Seoul.

The S&P GSCI gauge of commodities gained 1.3 percent on Wednesday.

Ricoh Co gained 4.1 percent to 591 yen in Tokyo after Deutsche Bank AG advised buying shares of the imaging company.

Brambles Ltd, the world's largest supplier of warehouse pallets, fell 5 percent to A$6.42 in Sydney after scrapping the sale of a unit and selling new stock at a discount.