A man passes by the word "stock" at the Tokyo Stock Exchange.—Reuters Photo
A man passes by the word "stock" at the Tokyo Stock Exchange.—Reuters Photo

HONG KONG: Asian markets were generally higher Tuesday, their third consecutive positive session, amid continued hopes for new stimulus measures by European and US central banks.

Tokyo stocks closed up 0.69, or 59.62 points, at 8,695.06, amid hopes for a firm recovery by Japanese high-tech manufacturers before they released quarterly earnings.

Sydney gained 0.55 per cent, or 23.5 points, to 4,269.2, and Seoul finished 2.07, or 38.20 points, higher at 1,881.99.

Hong Kong was up 0.78 per cent in afternoon trade but Shanghai was down 0.17 per cent on fears the slowing domestic economy may hurt corporate earnings.

Taipei was up 1.56 per cent, despite government figures showing the economy shrank by 0.16 per cent year-on-year in the second quarter, its first contraction since late 2009.

Hopes for new rounds of monetary stimulus by the Federal Reserve have been heightened by weak US growth data, while European leaders and ECB chief Mario Draghi have pledged to do whatever is necessary to protect the euro.

The Federal Open Market Committee was to start a two-day meeting later Tuesday, after the US government reported last week that growth in the world's biggest economy slowed to 1.5 per cent in the second quarter, from 2.0 per cent in the first quarter.

On Thursday, the Bank of England and the European Central Bank (ECB) will unveil their latest monetary policy decisions, as both grapple with fallout from the ongoing eurozone sovereign debt crisis.

“It's all about the ECB,” Chris Weston, institutional dealer at IG Markets in Australia, told Dow Jones Newswires.

He said Draghi's pledge to do whatever it takes to preserve the euro had “made people believe we will see a strong policy response”.

US President Barack Obama said late Monday that the eurozone had to take “decisive steps” to deal with the crisis.

“I'm spending an enormous amount of time trying to work with them — and (US Treasury Secretary) Tim Geithner is spending a lot of time working with them — to recognise that the sooner they take some decisive action, the better off we're going to be,” Obama told campaign donors.

In Japan, the unemployment rate edged down from 4.4 per cent in May to 4.3 per cent in June, while average household spending rose 1.6 per cent from a year earlier, offering a glimmer of hope for the nation's fragile economy.

After the markets closed in Tokyo, Honda Motor announced profits had surged more than fourfold to $1.7 billion for the three months to June compared to the same period last year, while Panasonic swung into the black posting a net profit of $164 million.

On Monday the Dow Jones Industrial Average finished at 13,073.01, drifting down 0.02 per cent, while the S&P 500 slipped 0.05 per cent to 1,385.30 and the Nasdaq was off 0.41 per cent at 2,945.84.

On currency markets the euro was at $1.2263 in afternoon trade Tuesday from $1.2260 in New York, and was also slightly firmer against the Japanese currency, buying 95.92 yen from 95.86. The dollar was at 78.21 yen from 78.19 yen.

On oil markets, New York's main contract, light sweet crude for delivery in September, was five cents lower at $89.73 a barrel and Brent North Sea crude for September delivery shed 11 cents to $106.09.

Gold was at $1,621.40 at 0620 GMT, from $1,618.30 on Monday.

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