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China stimulus buoys Australian stocks as yen hits japan futures

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[WELLINGTON] Stocks in Australia and New Zealand climbed after China bolstered economic stimulus, while Japanese index futures signaled losses following a resurgence in the yen.

Energy and mining shares drove gains in Sydney as the kiwi dollar tracked an advance in the local equity market. Chinese index futures also rose in most recent trading.

The yen extending its climb into a second day weighed on the outlook for Japanese stocks, with contracts on the Nikkei 225 Stock Average declining at least 0.3 per cent in Chicago and in the Osaka pre-market.

US crude held near its highest level in more than seven weeks, while copper futures retreated. Gold extended its rally. The yuan held gains offshore after the People's Bank of China announced a cut in reserve-requirement ratios.

February was a mixed month for financial markets, with global stocks capping a fourth consecutive monthly decline despite rallying more than 5 per cent since Feb 11.

Mounting signs that American consumers can still power the world's largest economy and hints from central banks in Asia and Europe that more stimulus is at the ready underpinned the revival, along with crude's recovery from a 12-year low. China said Monday it would reduce the amount of cash lenders must lock away in a bid to cushion a slowdown there.

"It promises to be a huge day for markets," Chris Weston, chief markets strategist in Melbourne at IG Ltd, said in an e-mail to clients.

"In theory, we should gain a real sense of how traders aggregate a 50 basis-point cut from the PBOC. We should see some upside in Chinese equity markets."

Stocks Australia's S&P/ASX 200 Index added 0.8 per cent as of 8:54 am Tokyo time, while the S&P/NZX 50 Index in Wellington climbed 0.3 per cent.

Futures on the FTSE China A50 Index jumped 1.4 per cent in most recent trading, while contracts on Hong Kong's Hang Seng and Hang Seng China Enterprises indexes climbed at least 1.2 per cent.

A raft of manufacturing purchasing managers' indexes are due Tuesday, including for China, India and Japan.

While South Korean markets are closed for a holiday, trade data is due in Seoul, and Thailand updates on consumer prices.


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