Asia stocks rallied on Wednesday on hopes Citigroup will deliver a first quarter profit, relieving fears U.S. banks are spiralling toward nationalisation and emboldening investors to sell U.S. dollars.
Citi, whose share price traded below $1 for the first time last week, was profitable in the first two months of 2009, the bank's chief executive said in a memo to staff, heaping pressure on the firm to post a quarterly profit after chalking up losses in the last five quarters totalling around $37.5 billion.
Wall Street jumped 6 percent overnight, helped by Citi and comments from an influential U.S. congressman that rules against short selling stocks would be re-implemented in a month. That put upward pressure on Asian shares traded in the United States and inspired hopes for a lasting rally in the region.
"Today is the first good day for a long period. You would like to think it's sustainable," said Dean Fergie, managing director of funds manager Opis Capital in Australia.
Japan's Nikkei share average rose 3.9 percent, rebounding off a 26-year low plumbed on Tuesday. The country's largest banks outperformed the broader market, with shares of top bank Mitsubishi UFJ Financial Group up 6.1 percent.
Australia's benchmark S&P/ASX 200 index rose 2 percent, helped by miners BHP Billiton Ltd and Rio Tinto Ltd on a rise in metals prices.
The euro rose 0.4 percent to $1.2725, pulling back from a 3-½ month low around $1.2455. The dollar was steady at 98.70 yen, having come off a a four-month high near 99.70 yen hit last week.
"When risk appetite falls the dollar attracts buying and when such tolerance increases the dollar tends to be sold," said Yuji Saito, head of the foreign exchange sales department at Societe Generale in Tokyo.
U.S. crude futures edged up after falling nearly 3 percent overnight following a cut in the U.S. government's forecast for world oil demand this year. Crude for April delivery rose 0.7 percent to $46.03 a barrel.
Gold slipped 0.2 percent to $893.75 an ounce in the spot market, creeping back down to Tuesday's one-month low. Gold is down more than 10 percent from the 11-month high above $1,000 hit on Feb. 20, as investors chip away their safety trades.
