admingummed-up financial system and China cut the amount of cash lenders must hold in reserve.
Regional shares followed a global rally as credit crunch fears aggravated by the European debt crisis eased.
Tokyo rallied 1,93 percent, or 162,77 points, to end at 8 597,38, while Seoul closed 3,72 percent, or 68,67 points, higher at 1 916,18 and Sydney was 2,64 percent, or 108,8 points, higher at 4 228,6.
Hong Kong surged 5,63 percent, or 1 012,91 points, to 19 002,26 while Shanghai closed up 2,29 percent, or 53,45 points, at 2 386,86.
In a surprise move on Wednesday the central banks of the United States, the eurozone, Britain, Japan, Canada and Switzerland said they would cut the cost of providing dollars to banks.
“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” they said in a statement.
European banks have for months found difficulty in raising dollars on the markets after US investment funds pulled out over concerns about the eurozone debt crisis.
However, Bank of Japan Governor Masaaki Shirakawa warned that the move was not enough on its own to solve Europe’s fiscal woes.
“The European debt problem can’t be solved by liquidity provisions alone,” he told a Press conference, according to Dow Jones Newswires.
Eyes will now be on a European summit next week, where pressure will be on leaders to come up with a plan to tackle the region’s two-year-old sovereign debt crisis, which has roiled markets.
The arrangement allows the central banks to lend dollars to commercial banks that might be finding it hard to borrow directly from other banks.
They said they would reduce the interest rate on this operation by half a percentage point from December 5 until February 1, 2013.
“The move intended to help short-term funding at financial institutions (amid Europe’s sovereign-debt crisis) came as a surprise,” said Yoshihiro Okumura, general manager at Chibagin Asset Management.
“This illustrates how urgent the situation might be.”
Also on Wednesday Beijing said it would cut the reserve requirement ratio by 50 basis points in a bid to boost liquidity, the first such move by China since the global downturn amid expectations of a bout of monetary easing.
Official data yesterday showed that manufacturing activity in the world’s second biggest economy contracted in November for the first time since February 2009 after more than a year of rate hikes and RRR rises aimed at curbing inflation.
The figures backed up a similar report by HSBC last week.
Global markets surged on Wednesday. On Wall Street the Dow soared 4,2 percent, the broader S&P 500 jumped 4,3 percent and the Nasdaq Composite added 4,2 percent.
London’s FTSE 100 was up 3,16 percent, the German Dax added 4,98 percent and Paris’s CAC 40 gained 4,22 percent.
In early trade yesterday London was down 0,13 percent, Frankfurt eased 0,76 percent and Paris was 0,92 percent off.
Adding to upward momentum in the United States was data from payrolls processing firm ADF showing private sector jobs rose by
206 000 in November, a strong rise from the previous month.
ADP also revised its October reading sharply higher to 130 000 from an initial estimate of 110 000.
The euro received a much-needed boost in New York, jumping more than a cent to
US$1 3438 and to 104,25 yen from 103,66 yen.
In early European trade the common currency fetched US$1,3475 and 104,68 yen. The dollar was at 77,69 yen against 77,58 yen late in New York. New York’s main contract, light sweet crude for delivery in January, gained 26 cents to US$100,62 a barrel.
Brent North Sea crude for January delivery was 23 cents higher at US$110,75.
And dollar-priced gold jumped as the US unit weakened. The precious metal was trading at Us$1 750,10 an ounce from US$1 705,75 late on Wednesday.
In other markets Singapore closed up 2,20 percent, or 59,42 points, at 2 761,88.
Noble Group gained 5,26 percent to Sg$1,20 and United Overseas Bank rose 3,49 percent to Sg$15,73. Taipei surged 3,98 percent, or 274,57 points, to 7 178,69.
Fubon Financial Holding closed at Tw$32,5, and Cathay Financial Holding at Tw$32,6. Both were up by their seven percent daily limit.
Manila gained 1,89 percent, or 79,55 points, to 4 290,59. San Miguel rose 0,2 percent to 123,10 pesos and port operator ICTSI added 1,3 percent to 54,70 pesos. Wellington rose 0,22 percent, or 7,10 points to 3 277,31.
Telecom slipped 2,0 percent to NZ$1,99, Fletcher Building closed up 2,5 percent at NZ$6,07 and Air New Zealand was unchanged on NZ$0,97.
Kuala Lumpur gained 0,89 percent, or 13,16 points, to end at 1 485,26.
Malayan Banking added 1,1 percent to 8,39 ringgit, while Petronas Chemicals increased 3,0 percent to 6,17. – AFP.
Telecoms firm Axiata Group fell 3.3 percent to 4.93 ringgit.
— Jakarta rose 1.78 percent, or 66.02 points, to 3,781.10.
Bank Mandiri rose 3.9 percent to 6,650 rupiah and car maker Astra added 0.9 percent to 71,500 rupiah, while Telkom ended down 0.7 percent to 7,300 rupiah.
— Bangkok added 2.39 percent, or 23.82 points, to finish at 1,019.15.
— Mumbai closed up 2.23 percent, or 359.99 points, at 16,483.45. – AFP
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