Japanese stocks posted their biggest gain in nearly seven years today, leading other world indexes higher, as Asian officials sought to counter pessimism about prospects for markets and economic growth.
Japan's Nikkei 225 index vaulted 7.7 per cent to 18,770.51, its biggest one-day rise since October 2008, when markets were volatile during the global financial crisis, and its 10th biggest gain since 1949. Other major Asian markets rose between 2 and 4 per cent.
The strong gains come after three months of weakness in stock markets that was partly sparked by the dramatic sell-off in Chinese shares beginning in early June.
Economic policy measures in China and Japan were positives for investors today but there were also technical factors at work in the rebound, analysts said.
"Buoyant sentiments were in full display across Asia as regional bourses flashed green," said Bernard Aw, market strategist at IG in Singapore. "Risk is back in vogue and the European traders clearly embrace it as well," he said in market commentary.
European markets rose strongly in early trading. France's CAC 40 added 2.1 per cent to 4,659.01 and Germany's DAX gained 1.7 per cent to 10,447.69. Britain's FTSE 100 rose 1.8 per cent to 6,255.42.
US stocks were poised to open higher a day after posting their second biggest gains of the year. Dow futures were up 1.1 percent to 16,638.00. Broader S&P 500 futures rose 1 percent to 1,986.10.
The Nikkei, which had earlier hit its lowest level since February, bounced after comments from Prime Minister Shinzo Abe that raised expectations of more measures to shore up economic growth under his "Abenomics" stimulus programme.
The remarks gave an extra boost to Japanese stocks, which some analysts said were lagging behind the recovery this week on Wall Street and other global markets.
"The markets overnight looked much healthier while the Nikkei was still pointing in the wrong direction," said Ben Collett, head of Japan and Asian equities at Sunrise Brokers in Hong Kong.
"The unsexy truth is that this is a lot of people moving to buy stock and not many sellers.
