GLOBAL MARKETS-Asia stocks at 2-month high on US bad debt plan

                                
 * U.S. stock futures up 1.5 pct, Treasuries tumble
                                
 * Mizuho, MUFG stock up more than 5 percent
                                
 * Australia dlr, sterling rise vs yen as higher yields
sought
                                
 * Details on US bad loans plan gives hope, provokes
questions
                                
 By Kevin Plumberg
                                
 HONG KONG, March 23 (Reuters) - Asian stocks rose to a
two-month high on Monday and high-yielding currencies advanced
on the yen after details on a U.S. plan to rid banks of up to
$1 trillion of toxic assets improved confidence about risk
taking.
                                
 The White House said it would put in as much as $100
billion into a bailout fund and give attractive financing to
private investors to buy highly illiquid assets from banks,
sending dealers diving back into equities and selling safe
havens such as gold and U.S. Treasuries. [ID:nWEQ000809]
                                
 Details of the plan which slowly emerged through newspaper
reports over the weekend extended a global stock market rally
that has lasted nearly two weeks on hopes the financial system
was stabilising after some of the largest U.S. banks said they
had solid results in the first two months of the year.
                                
 Already BlackRock Inc <BLK.N>, the largest U.S. publicly
traded asset manager, said it would take part in the plan,
relieving some uncertainty as to how much private participation
there would be.
                                
 "Given the extent of the crisis in the U.S. banking sector,
this is an essential step to restoring confidence, if carried
out correctly. Banks need to free up capital to restore the
credit cycle, and this is a key step," said Annette Beacher,
senior strategist with TD Securities in Sydney.
                                
 The Nikkei share average <.N225> rose 2.9 percent, with
technology shares providing the biggest boost.
                                
 Japan's big bank shares were outperformers, with Mizuho
Financial Group <8411.T> up 5.7 percent and Mitsubishi UFJ
Financial Group <8306.T>, the country's biggest bank, up 5.2
percent. MUFG said earlier it would cut 1,000 jobs.
                                
 The MSCI index <.MIAPJ0000PUS> of Asia Pacific stocks
outside Japan was up 3.5 percent, hitting a two-month high. The
energy, financial and materials sectors were the largest
supports to the index.
                                
 Hong Kong's Hang Seng index <.HSI> rose 3 percent, led by
China Construction Bank's 5.3 percent gain. Index heavyweight
HSBC <0005.HK> actually slipped 3.5 percent as its deeply
discounted rights shares begin trading on Monday.
                                
 MORE DETAILS, MORE QUESTIONS
                                
 Removing bad loans from the balance sheets of U.S. banks,
which have kept financial institutions from lending more, has
been viewed by economists as essential before a recovery could
begin. The details on Monday took away some of the mystique as
to how the U.S. Treasury Department would get that done.
                                
 However, questions lingered as to price of the highly
illiquid assets, fears about the ballooning federal deficit
simmered as the stock market rally persisted and the fate of
Wall Street bonuses.
                                
 "The government has to do this, but so far, every step the
Treasury and the Federal Reserve have taken has been
artificial. They are pumping a lot of money into the system,
but that is not improving confidence among private bankers,"
said Akira Takei, general manager of international fixed income
investment at Mizuho Asset Management in Tokyo.
                                
 For now at least, investors were given the green light to
venture back into riskier assets.
                                
 Currencies that were sold off heavily during the most
violent periods of market volatility performed well. The
Australian dollar rose more than 1 percent around $0.6980
<AUD=>, a two-month high, and sterling strengthened by 0.5
percent to $1.4500 <GBP=>.
                                
 The euro hit a five-month high against the yen, near 132
yen <EURJPY=>, following remarks by European Central Bank
President Jean-Claude Trichet underscoring that rates were
already at low levels and may turn to unconventional measures
to shore up the banking system.
                                
 U.S. Treasuries and Japanese government bonds were under
fire as stock markets picked up momentum. The yield on the
benchmark 10-year Treasury note <US10YT=RR> ticked up to 2.68
percent, up from around 2.65 percent late on Friday in New
York.
                                
 The 10-year yield has retraced about a quarter of the
decline suffered after the Federal Reserve last week stunned
markets by saying it would buy about $1 trillion of long-term
securities from the market, including $300 billion of
Treasuries.
                                
 U.S. crude futures <CLc1> rose over 1 percent towards $53 a
barrel on Monday, bolstered by expectations that the U.S.
Treasury's efforts to stabilise the ailing financial system
would speed up a recovery of the U.S. economy.