A man checks time outside a securities firm in Tokyo, Japan, Wednesday, Jan. 7. The Nikkei Stock Average rose 2 percent in the morning trading.
HONG KONG — Asian stocks extended their New Year's rally Wednesday, with Japan's index up nearly 2 percent, on hopes that stimulus measures from a new U.S. administration would help speed the world's economic recovery.
The yen continued to lose ground against the dollar, buoying shares in exporters, and crude oil prices were steady after briefly touching above $50 a barrel overnight, their highest point since Dec. 1.
Since falling to multiyear lows in November, global equities have advanced strongly, with a number of major benchmarks up more than 10 percent before the year's end. Markets have shown few signs of slowing in 2009, as investors poured money back into riskier assets, such as emerging market stocks, amid speculation that government policies will help bring an end to the global slump later this year.
In recent days, buying sentiment has been supported by U.S. President-elect Barack Obama's proposals to revive the world's largest economy with spending and tax measures that could cost as much as $775 billion. Overnight, Obama said the U.S. could face trillion-dollar deficits for years to come as it moves ahead with its massive stimulus spending.
However, with company earnings expected to be dire in the coming months, the "Obama effect" could be short-lived, said Peter Lai, investment manager at DBS Vickers in Hong Kong.
"After the honeymoon period of Obama wears off, people will realize the cruel reality of the economic slowdown and the credit crisis," Lai said.
Tokyo's Nikkei 225 stock average rose 158.40 points, or 1.7 percent, to 9,239.24, as the weakening yen led investors to buy exporters. Honda Motor Co., Japan's No. 2 carmaker, jumped 13.5 percent, Nikon Corp. soared 15.9 percent and Sony Corp. added 9.4 percent.
Elsewhere, South Korea's Kospi gained 2.8 percent to 1,228.17, while benchmarks in Australia, Taiwan, Singapore, the Philippines and Malaysia were higher by about 1 percent or more. Stock measures in Hong Kong and Shanghai were slightly lower.
Also buoying the region were overnight gains on Wall Street, where investors again brushed off more dismal readings about the U.S. economy. Pending home sales fell to the lowest level on record in November, while November factory orders dropped nearly twice as much as economists had expected.
The Dow Jones industrial average gained 62.21, or 0.7 percent, to 9,015.10. Broader stock indicators showed steeper advances to end at their highest levels since Nov. 5. The Standard & Poor's 500 index rose 7.25, or 0.8 percent, to 934.70.
U.S. futures eased modestly, pointing to a soft open on Wall Street. Dow futures were down 26 points, or 0.3 percent, at 8,924 and S&P500 futures fell 2.9 points, or 0.3 percent, to 927.60.
Oil prices were steady, with light, sweet crude for February delivery down 13 cents at $48.45 a barrel in Asian trade. Overnight, the contract fell 23 cents to settle at $48.58 a barrel after prices at one point reached $50.47.
In currencies, the dollar rose to 93.93 yen, up 0.59 percent from 93.38 yen. The euro was little changed at $1.3517.