World stock markets as Bernanke promises action, Japan central bank eases policy,

World markets rise as Bernanke promises action

BANGKOK — World markets advanced Monday, boosted by the Federal Reserve chief vowing to take action if the U.S. economy weakens further and Japan easing monetary policy to protect a shaky recovery.

The willingness of major central banks to take more action to prevent a slide back into recession reassured investors who have been unnerved the past month by evidence from the U.S. to China that suggests the economic recovery is running out of juice.

“Investors believed that the U.S. government will not let the economy fall again,” said Wen Lijun, an analyst for Nanjing Securities in Shanghai.

But the optimism could be short-lived if economic indicators due this week show the slowdown in the world’s biggest economy is becoming entrenched. U.S. indicators this week include figures on services, manufacturing and employment.

European markets followed Asia higher in early trade. The CAC-40 in France rose 0.1 percent and Germany’s DAX was ahead by 0.1 percent. Wall Street was set to post slight gains with Dow futures up 5 points, or 0.1 percent, at 10,146.00 and broader S&P futures higher by 1.6, or 0.2 percent, at 1,065.30.

In Tokyo, the Nikkei 225 stock average closed up 158.20, or 1.8 percent, to 9,149.26 after the Bank of Japan decided at an emergency board meeting to further ease monetary policy by expanding a low-interest loan program for financial institutions to 30 trillion yen ($355 billion) from 20 trillion yen.

“With this, the bank will encourage a decline in market interest rates and further enhance easy monetary conditions,” it said in a statement.

The central bank has been under growing political pressure to take action on the strong yen, which is hurting exporters and undermining a faltering economic recovery. Later in the day, Prime Minister Naoto Kan is also expected to announce a framework for additional economic stimulus measures.

News of the BOJ meeting initially sent the Nikkei higher by 3.1 percent.

South Korea’s Kospi rose 1.8 percent to 1,760.13 and the Shanghai Composite index added 1.6 percent to 2,652.66. Hong Kong’s Hang Seng advanced 0.7 percent to 20,737.22.

Australia’s S&P/ASX 200 gained 1.9 percent to 4,452.70 as commodity stocks posted healthy gains. Australian miner Rio Tinto Ltd. climbed 2.5 percent.

Markets in India, Taiwan, Singapore and Thailand also gained.

Sentiment in Asia and Europe was bolstered by big gains in New York on Friday.

The Dow Jones industrial average rose 164.84, or 1.7 percent, to close at 10,150.65 after Fed Chairman Ben Bernanke said the central bank was ready to step in if the U.S. economy showed further signs of weakening.

The Standard & Poor’s 500 Index rose 17.37, or 1.7 percent, to 1,064.59 and the Nasdaq composite index rose 34.94, or 1.6 percent, to 2,153.63.

In currencies, the dollar fell to 84.88 from 85.21 yen late Friday in New York. The euro fell to $1.2728 from $1.2761.

Benchmark crude for October delivery was down 25 cents at $74.92 a barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $1.81 to settle at $75.17 per barrel on Friday.