By V. Phani Kumar, MarketWatch HONG KONG (MarketWatch) -- Asian markets rallied Wednesday, with resource shares rising sharply on higher commodity prices, while a weaker yen boosted Japanese exporters. Hong Kong shares advanced as trading resumed for the first time this week after the Lunar New Year holidays, aided by Chinese lenders, which shrugged off the People's Bank of China's decision Friday to increase banks' reserve requirements. "Debt fears out of Europe have continued to abate, New York state manufacturing data was much better than expected, and you had commodity price strength and good results from Barclays and Merck. That has seen some risk appetite return to the market," said IG Markets strategist Cameron Peacock. Japan's Nikkei 225 advanced 2.7% for its best single-day percentage gain this year, Australia's S&P/ASX 200 added 2.2%, South Korea's Kospi gained 1.7% and Hong Kong's Hang Seng Index tacked on 1.3%. In afternoon trading, Singapore's Straits Times Index climbed 0.9% as trading also resumed in the city-state after Lunar New Year holidays, while India's Sensex advanced 1.2%. Stock markets in China, Taiwan and Vietnam remained closed. Dow Jones Industrial Average (INDU 10,269, +169.67, +1.68%) futures were 12 points higher in screen trade. Concerns about Greece were on the backburner, although European Union finance ministers Tuesday stopped short of an explicit rescue plan for the country. Traders said worries appear to have eased somewhat after the EU gave the fiscally stressed country until mid-March to devise a more comprehensive fiscal consolidation plan for 2010. "The market's convinced that Greece is going to be saved at the end of the day," said Phil Flynn, an analyst with PFGBest in Chicago. Still, Mizuho Securities market analyst Yukio Takahashi said that while global investors have become less risk averse, it "doesn't mean that [the] fears are gone . . . Investors still need to wait for Greece's turnaround plan to come out in March." Regional resource and shipping stocks marched higher on the back of an increase in gold and crude-oil prices. In Australia, BHP Billiton (BHP 74.56, +2.43, +3.37%) (AU:BHP 41.38, +0.84, +2.07%) added 2.1%, Rio Tinto (AU:RIO 72.92, +2.34, +3.32%) (RTP 211.84, +8.79, +4.33%) gained 3.3% and Newcrest Mining (AU:NCM 33.67, +1.39, +4.31%) (NCMG.Y 29.41, +0.59, +2.05%) tacked on 4.3%. Mitsui O.S.K. Lines (JP:9104 556.00, +13.00, +2.39%) (MSLO.Y 18.50, -0.10, -0.54%) surged 5% and commodities trader Marubeni Corp. (MARU.Y 57.45, -1.04, -1.78%) (JP:8002 520.00, +8.00, +1.56%) gained 3.1% in Tokyo, Yanzhou Coal Mining (YZC 20.93, +0.55, +2.70%) (HK:1171 16.32, +0.38, +2.38%) gained 2.4%, Zijin Mining Group (HK:2899 6.75, +0.18, +2.74%) (ZIJMF 0.86, +0.04, +4.88%) rose 2.7% and China Cosco Holdings (CICO.Y 6.11, 0.00, 0.00%) (HK:1919 9.69, +0.20, +2.11%) added 2.1% in Hong Kong. Gains on Wall Street and a weakened yen propelled several Japanese exporters. Canon (CAJ 40.03, +0.49, +1.24%) (JP:7751 3,560, +30.00, +0.85%) jumped 4.2%, Nikon (NINO.Y 218.00, +10.25, +4.93%) (JP:7731 1,932, +7.00, +0.36%) surged 5.5% and Nissan Motor (NSAN.Y 16.21, +0.17, +1.06%) (JP:7201 722.00, +5.00, +0.70%) advanced 3.2%. Toyota Motor (TM 76.01, -1.04, -1.35%) (JP:7203 3,380, +25.00, +0.75%) managed to reverse earlier losses to end flat in the buoyant market, although the auto maker said Tuesday it plans to temporarily suspend production at two U.S. assembly plants as it adjusts production to inventory levels amid the string of recent recalls. "Although this isn't a new negative, the suspension may remind investors that the negative impact of the recalls on future sales may turn out to be more serious than expected," said Mizuho Investors Securities analyst Ryoichi Saito. Read full story. U.S. President Barack Obama's announcement of $8.3 billion in federally backed loans to the country's nuclear-power industry boosted industry players in Japan. Toshiba (TOSY.Y 28.85, +0.12, +0.41%) (JP:6502 427.00, +2.00, +0.47%) soared 6.3%, Hitachi (HIT 33.35, -0.73, -2.14%) (JP:6501 295.00, -6.00, -1.99%) climbed 2.7% and Mitsubishi Heavy Industries (MHVY.Y 34.90, -2.05, -5.55%) (JP:7011 317.00, 0.00, 0.00%) gained 2.8%. "The U.S. remains a key market for nuclear plant-related orders, and Toshiba already has a foothold there through its Westinghouse unit," said Mizuho Investors Securities analyst Yuichi Ishida. Chinese banks added to overall market gains in Hong Kong, ignoring the PBOC's move Friday to increase lenders' reserve requirements by a half-point. Deutsche Bank analysts said the monetary tightening measure was expected to marginally lift bank earnings by improving the return on their excess reserves. Shares of Industrial & Commercial Bank of China (HK:1398 5.70, +0.12, +2.15%) gained 2.2% and Bank of China (BACH.Y 12.63, +0.50, +4.12%) (HK:3988 3.88, +0.07, +1.84%) advanced 1.8%. In Sydney, banking shares extended gains, with Westpac Banking (AU:WBC 25.43, +0.69, +2.79%) (WBK 113.73, +11.08, +10.79%) advancing 2.8% on brokerage upgrades following its strong quarterly trading update Tuesday. National Australia Bank (AU:NAB 25.91, +0.87, +3.47%) (NABZ.Y 22.97, +1.40, +6.49%) shares climbed 3.5%, while Australia & New Zealand Banking Group (AU:ANZ 22.06, +0.97, +4.60%) (ANZB.Y 19.46, +1.33, +7.34%) gained 4.6%. In Seoul, Daewoo Engineering & Construction (DWOT.F 35.17, +0.35, +0.99%) remained in the spotlight after STX Group said it is interested in joining a private equity fund led by Korea Development Bank as a strategic investor to acquire a controlling stake in the company. The stock climbed 4%, on top of its 6.1% advance Tuesday. In foreign exchange trading, the euro advanced against major currencies on a broad improvement in risk appetite. It rose to $1.3775 from $1.3772 late Tuesday in New York, and to 124.41 yen from 124.08 yen. The dollar was buying 90.31 yen, compared with 90.11 yen. "Having amassed record short-euro positions, it should not come as a surprise that speculators against the euro have started to worry about who would be headed for the exit soon. More so now that markets appear to be holding up relatively well despite China's latest monetary move and Greece's problem," DBS said in a report. Japanese government bond futures were lower on profit-taking and stock gains in Tokyo, with the lead March contract down 0.09 at 139.61. Spot gold was bid at $1,121.50 a troy ounce, rising $3.70 on top of its overnight gains in New York. Front-month Nymex crude-oil futures were at $77.46 a barrel on Globex, up 45 cents from the New York close.

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