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Japan stocks jump on BOJ candidate speculation

Kelvin Chan, AP Business Writer

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)

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 ½ years.

The Japanese government wants to revive the economy by boosting inflation, and investors believe that will result in a weaker yen, which would boost the country's exporters and also put upward pressure on prices. In other currency trading, the euro climbed to $1.3237 from $1.318.

In mainland China, the Shanghai Composite Index climbed 0.5 percent to close at 2,325.82 and the smaller Shenzhen Composite Index ended 0.8 percent higher at 955.79.

Chinese stocks rose even though a survey showed manufacturing activity this month declined to a four-month low, a reminder of possible threats to recovery in the world's second biggest economy.

However, analysts at Societe Generale said in a research note that result may not be as bad as it seems, because the weeklong Lunar New Year holiday, which fell in mid-February this year, "was at least partially responsible for the surprisingly sharp fall."

Investors were also treading carefully ahead of a slew of major political and economic events with market-moving implications.

"We are waiting for a lot of things to happen this week," said Jackson Wong, a vice president at Tanrich Securities in Hong Kong.

They include Italian election results expected by Tuesday that will have a big impact on the European financial crisis, a Friday deadline for U.S. spending cuts and a meeting in Beijing next week that will complete a Chinese political transition begun last year and reveal clues about policy direction.

"So the turnover or sentiment is still pretty cautious," Wong said.

In energy markets, benchmark crude for April delivery was up 39 cents to $93.52 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 29 cents to $93.13 on Friday.