Asian markets higher on US, Europe lead

Asian markets have mostly risen following a lead from the US and Europe amid rising hopes that central banks are poised to act to boost economic growth.

But the euro weakened before a European Central Bank meeting on Thursday as traders waited to see whether the bank would back a deal to help the eurozone, and oil slipped back after a rally in the US sparked by Iranian sabre-rattling.

Tokyo closed up 0.41 per cent, or 37.58 points, on Wednesday at 9,104.17, its highest finish in about two months, while Sydney was up 1.09 per cent, or 45.0 points, to end at 4,172.2, led by mining and resources stocks.

Seoul finished 0.35 per cent, or 6.63 points, higher at 1,874.45, while in afternoon trade Hong Kong edged down 0.09 per cent, and Shanghai was off 0.13 per cent.

Investors are pinning their hopes on a new round of stimulus measures, known as quantitative easing, from the US Federal Reserve, after weak manufacturing data this week added to concerns about the world's biggest economy.

They are also looking ahead to Friday, when the US government releases its highly anticipated June job growth and unemployment numbers, with the data expected to encourage the Fed to implement more policy easing, dealers said.

Eurozone data, which showed unemployment at a euro-era high of 11.1 per cent and weak manufacturing activity, has raised hopes that the ECB will cut its rate from the current record low of 1.0 per cent to stem the bloc's debt crisis.

"Macro factors are the market movers right now, with everyone expecting more rate cuts and currency printing," said CLSA equity strategist Nicholas Smith.

Daniel Brdanovic, HSBC New Zealand chief manager, told Dow Jones Newswires that markets were expecting the ECB to trim rates but the bank's statement would also be closely watched.

"Markets will be looking to see whether the ECB comes out to support what the European leaders came out with last week," he said.

European leaders agreed at a key summit in Brussels last week to use emergency funds to recapitalise ailing banks directly.

They also agreed to contribute $US150 billion ($A146.36 billion) to boost growth.

US stocks were boosted on Tuesday by a report showing strong factory orders for May and robust June sales from leading American automakers.

In a trading session which ended early before the July 4th Independence Day holiday, the Dow Jones Industrial Average was up 0.56 per cent, the S&P added 0.62 per cent, while the tech-rich Nasdaq put on 0.84 per cent.

In Europe, the prospect of central bank action also buoyed markets, with most major markets adding around 1.0 per cent.

On Asian currency markets on Wednesday, the euro bought $1.2592 and 100.44 yen, against $1.2607 and 100.64 yen in US trade on Tuesday.

The US dollar stood at 79.75 yen in Tokyo, from 79.83 yen in New York.

Oil prices slipped following a strong rally in the US after Iran test-fired missiles and Iranian MPs backed a draft bill calling for the key Strait of Hormuz to be closed to oil tankers in retaliation for an EU oil embargo.

New York's main contract, light sweet crude for delivery in August fell 55 cents to $87.11 a barrel and Brent North Sea crude for August delivery shed 61 cents to $100.07.

Gold was at $1,615.04 an ounce at 0720 GMT (1720 AEST) compared with $1,609.00 an ounce late on Tuesday.

In other markets:

-- Taipei edged up 0.06 per cent, or 4.23 points, to 7,422.59.

Hon Hai Precision rose 1.66 per cent to Tw$92.0 while smartphone maker HTC was 0.51 per cent higher at Tw$397.0.

-- Wellington was up 1.13 per cent, or 38.48 points, to close at 3,483.12.

Telecom Corp. was up 2.7 per cent at NZ$2.495, Fletcher Building rose 1.0 per cent to NZ$6.20 and Chorus gained 0.2 per cent to NZ$3.20.

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