Japan's Top Central Banker Wants To Step Down Early, And Markets Are Absolutely Thrilled About It

(AP Photo/Jacquelyn Martin)

TOKYO (AP) — Asian shares rose Wednesday as Japan's benchmark surged to its highest level since Sept. 2008 though wariness over corporate earnings pulled European indexes lower in early trading.

The Japanese yen's slide to a three-year low on news the Bank of Japan governor will resign early spurred a 3.8 percent jump in the Nikkei 225 stock index. It gained 416.83 points to 11,463.75 as export shares soared on expectations of stronger sales thanks to the yen's slide against other major currencies. Toyota Motor Corp. jumped 6 percent, Honda Motor Corp. added 3.3 percent and Sony climbed 3.8 percent.

The Japanese yen was trading at 93.68 yen per U.S. dollar, its lowest level in almost three years after BOJ Gov. Masaaki Shirakawa said he will step down three weeks early, for logistical reasons. Some investors took it as sign that whoever replaces Shirakawa will be likely to comply with pressure from the government to ease monetary policy to help stimulate economic growth.

Shirakawa said he is stepping down in tandem with his top deputies on Mar. 19 instead of when his own five-year term ends on April 8 and that his decision was not motivated by political pressure. But the central bank has been perceived as resisting pressure for more drastic monetary easing, despite its agreement last month to set a 2 percent inflation benchmark as demanded by Prime Minister Shinzo Abe.

In early European trading, Britain's FTSE 100 edged down 0.6 percent to 6,278.84. The CAC-40 in France fell 0.2 percent to 3,686.10 and Germany's DAX lost 0.3 percent to 7,641.81.

Arcelor-Mittal SA, the world's largest steelmaker, posted a larger loss for the fourth quarter due to write-downs and charges related to its European business while Vinci SA, Europe's biggest builder, also reported a drop in 2012 profitability.

Wall Street was set for modest gains with Dow Jones industrial futures up 0.2 percent at 13,941. S&P 500 futures added 0.2 percent to 1,508.20.

Hong Kong's Hang Seng rose 0.5 percent to 23,256.93, Australia's S&P/ASX 200 gained 0.8 to 4,921. In mainland China, the Shenzhen Composite Index added 0.5 to 951.52 while the benchmark Shanghai Composite Index added 0.1 to 2,434.48.

South Korea's Kospi erased early gains to fall for the fifth straight day, edging down 0.1 percent to 1,936.19. Shares in Malaysia and New Zealand fell, while benchmarks in Singapore, Taiwan and Indonesia rose.

"The recovery in overseas markets provided an excuse for the market to bounce back" after falls earlier in the week, said Kwong Man Bun, chief operating officer at KGI Securities in Hong Kong.

Strong gains in regional markets are partly being driven by higher liquidity thanks to the yen's weakness, which has brought on a flurry of carry trades in which traders borrow in a weaker currency with low interest rates, such as the yen, and use the funds to buy higher-risk shares in other markets, such as Hong Kong.

Wall Street and European stock markets pushed higher Tuesday after new indicators suggested the combined economy of the 17 euro countries is past the worst of its recession and the U.S. recovery remains on track.

A surge in U.S. home and stronger earnings helped push U.S. shares higher. The Dow Jones industrial average gained 99.22 points to 13,979.30, recovering much of what it lost Monday in the worst sell-off so far this year. The index traded above 14,000 during the day before falling back in the last hour.

The Standard & Poor's 500 gained 15.58 points to 1,511.29. The Nasdaq composite was up 40.41 points to 3,171.58.

In energy markets, benchmark crude for March delivery was up 3 cents to $96.33 per barrel in electronic trading on the New York Mercantile Exchange.

The euro was down 0.2 percent at $1.3536.