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Japan stocks jump on BOJ candidate speculation

Monday - 2/25/2013, 6:32am  ET

A man looks at an electronic stock board of a securities firm in Tokyo, Monday, Feb. 25, 2013. Japanese stocks led Asian markets higher Monday, jumping on a report that the prime minister's pick for the next central bank governor will be a strong advocate of loose monetary policy aimed at reviving the moribund economy. (AP Photo/Koji Sasahara)

KELVIN CHAN
AP Business Writer

HONG KONG (AP) -- Japanese stocks led most Asian markets higher Monday, roaring ahead on a report that the prime minister's pick for central bank governor will be a strong advocate of loose monetary policy aimed at reviving the moribund economy.

The benchmark Nikkei 225 surged 2.4 percent to end at 11,662.52 while the yen dropped against the dollar after local news outlets reported that Prime Minister Shinzo Abe was preparing to nominate Haruhiko Kuroda as the next governor of the Bank of Japan.

In early European trading, the FTSE 100 index of leading British companies was up 1.2 percent to 6,367.41 and Germany's DAX was up 1.2 percent to 7,750.74. France's CAC 40 rose 0.7 percent to 3,734.02.

U.S. stocks were poised to move higher. Dow futures were up 0.1 percent at 13,997.00 and broader S&P 500 futures rose 0.1 percent to 1,516.70.

Trading in other markets was subdued. Hong Kong's Hang Seng rose 0.2 percent to close at 22,820.08 while South Korea's Kospi ended 0.5 percent lower at 2,009.52.

Australia's S&P ASX 200 added 0.8 percent to 5,055.80. Benchmarks in Taiwan, Singapore and New Zealand also rose.

Abe's expected pick for central bank chief would be his latest move since taking office in December aimed at helping Japan escape two decades of economic stagnation.

Kuroda is an Oxford-educated former vice minister of finance who is currently president of the Asian Development Bank. The 67-year-old is seen as someone who backs Abe's plan to jumpstart the world's third-largest economy by fighting deflation through monetary easing and hefty government spending.

"The market has become very excited over this news as he will be a market friendly choice," Chris Weston of IG Markets in Melbourne wrote in a commentary. Japanese media reported that Abe was expected to announce the plan later Monday, but a tentative plan for a news conference was scrapped, a sign that agreement from coalition partners and opposition parties was uncertain.

The dollar strengthened to 94.09 Japanese yen from 93.42 in late trading Friday, as the Japanese currency sinks to its lowest in more than 2
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