* U.S. stock futures up 1.9 pct, Treasuries slip
* Mizuho, MUFG stock climb 5 pct as banks shine
* Australia dlr, sterling rise vs yen as higher yields
sought
* Details on bad loans plan gives hope, provokes questions
(Repeats story to more subscribers without changes in text)
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 of a U.S. plan to rid banks of up to
$1 trillion in toxic assets bolstered confidence in risk
taking.
The White House said it would put as much as $100 billion
into a bailout fund and give attractive financing to private
investors to buy highly illiquid assets from banks, prompting
dealers to dive back into equities and trim their holdings of
safe haven assets like U.S. Treasuries. []
Major European stock market futures rose more than 1
percent, indicating higher openings, while U.S. stock market
futures <SPc1> were up 2 percent as a wave of optimism spread.
Still, doubts lingered, with the U.S. housing market
showing few signs of bottoming yet, uncertainty over how the
bad debts will be priced and concerns whether more borrowing by
over indebted households is the solution to a credit crisis.
"If the U.S. authorities actually succeed in buying up to
$1 trillion of 'toxic assets', it would be considered a
significant step by the financial markets. However, the markets
will be disappointed if the programmes did not move forward due
to problems regarding how the assets' value is measured," said
Mamoru Yamazaki, chief economist with RBS Securities in Tokyo.
The Nikkei share average <> ended 3.4 percent higher,
closing at the highest level since late January, getting the
biggest boost from technology shares.
Shares in Japan's big banks outperformed. Mizuho Financial
Group <8411.T> rose 5.3 percent and Mitsubishi UFJ Financial
Group <8306.T>, the country's biggest bank, gained 4.7 percent.
MUFG said earlier it would cut 1,000 jobs.
The MSCI index <.MIAPJ0000PUS> of Asia Pacific stocks
outside Japan was up 4 percent, hitting a two-month high,
supported mostly by the energy, financial and materials
sectors.
Hong Kong's Hang Seng index <> rose 3.4 percent, led by
a 5.3 percent gain in China Construction Bank <0939.HK>. Index
heavyweight HSBC <0005.HK> slipped 2.5 percent as its deeply
discounted rights shares begin trading on Monday.
Details of the U.S. toxic debt 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.
BlackRock Inc <BLK.N>, the largest U.S. publicly traded
asset manager, said it would take part in the plan as an
investment manager on the programme, relieving some uncertainty
as to how much private participation there would be.
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 whether this plan was the
antidote to the monstrous problem that has ultimately sucked
the global economy into recession.
"The key to the success of all these initiatives is the
ability and willingness of corporations and U.S. households to
borrow. Households, especially, are still over-leveraged. The
solution to that is to save more out of current income and use
the savings to repay debt. But, lower interest rates
incentivise borrowings and not savings," said V.
Ananthan-Nageswaren, chief investment officer, Asia Pacific
with Julius Baer in Hong Kong.
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 to around $0.6980
<AUD=>, a two-month high, and sterling strengthened by 1
percent to $1.4565 <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 that the central bank may turn to
unconventional measures to shore up the banking system.
U.S. Treasuries were under pressure as stock markets picked
up momentum. The yield on the benchmark 10-year Treasury note
<US10YT=RR> ticked up to 2.67 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 in the U.S. economy.
