Asian stocks rose broadly on Monday on continued hopes of US and European stimulus measures after the German and Italian leaders issued a new pledge to protect the eurozone. Speculation is also rife that the U.S. Federal Open Market Committee will consider the need for additional policy measures to shore up the global economy at a two-day meeting that concludes on August 1 after data showed U.S. GDP growth had slowed in the second-quarter.
ECB President Mario Draghi's strongly-worded pledge last week to do whatever it takes to preserve the euro bolstered hopes that the ECB, which is due to hold a policy meeting on Thursday, will step in to buy Spanish and Italian bonds to lower the countries' borrowing costs.
The central bank is also expected to give its rescue fund, the European Stability Mechanism, a banking license, in an attempt to allow greater flexibility and freedom to help ailing eurozone states. Over the weekend, Eurogroup head Jean-Claude Juncker said in an interview that the ECB will soon act to save the currency bloc.
Tokyo stocks rose for the third straight day, thanks to easing concerns about Europe. The Nikkei average rose 0.8 percent, with worse-than-expected Japanese industrial production data capping further upside. The broader Topix index gained 0.7 percent.
Japan's industrial production was down a seasonally adjusted 0.1 percent from the previous month in June, marking its third consecutive monthly decline, the Ministry of Economy, Trade and Industry said in a preliminary report. On a yearly basis, industrial production fell 2.0 percent - also missing expectations for a contraction of 0.1 percent following the 6.0 percent jump in the previous month.
Komatsu ended down 1.8 percent on a Nikkei report that its first-quarter operating profit probably declined by about 20 percent in the April-to-June quarter due to lower public works spending in China. Kansai Electric Power and Tohoku Electric Power plunged 11-12 percent on earnings concerns as thousands of activists held their latest protest around parliament, demanding that the government not restart the nuclear power plants. Fujifilm climbed 6.2 percent after announcing better-than-expected first-quarter results.
China's Shanghai Composite index bucked the regional uptrend to end 0.9 percent lower ahead of the release of PMI numbers due on Wednesday and the U.S. jobs report later this week, while Hong Kong's Seng index rose 1.06 percent.
Australian shares hit a 10-week high, but gains were limited as ratings agency Moody's said the ECB cannot resolve the eurozone crisis alone. The benchmark S&P/500 rose 0.9 percent, while the broader All Ordinaries index closed 0.8 percent higher.
Financials paced the gainers, with Commonwealth Bank rallying 1.8 percent, while Westpac, ANZ and NAB rose between 1.1 percent and 1.4 percent. Big miners BHP Billiton and Rio Tinto rose 0.7 percent and 0.6 percent, respectively, while smaller rival Fortescue fell 1.5 percent.
Shares of Northern Iron soared 10.6 percent after the iron-ore explorer received an A$525 million ($550 million) takeover bid from Swiss-based trading house Prominvest AG. Building-material firms such as Brambles and CSR added 1-2 percent after a Housing Industry Association survey showed home sales in Australia rose 2.8 percent in June from 0.7 percent in the previous month.
New Zealand shares rose for a third consecutive session, tracking strong regional cues. The benchmark NZX 50 Index rose half a percent as investors eagerly awaited what the U.S. and European central banks will say this week. Heavyweight Telecom rose 2.6 percent, while Ryman Healthcare, the nation's largest listed retirement village operator, added 1.4 percent.
Construction firm Fletcher Building added a percent after government data showed New Zealand home building consents rose for the first time in three months in June, helped by earthquake rebuilding efforts and a jump in permits for apartments including rest-home units.
Gold Miner OceanaGold rallied 3.5 percent on better-than-expected second quarter earnings. Fishing company Sanford eased 0.3 percent after it decided to vigorously defend allegations that its San Nikunau vessel operating out of American Samoa polluted the ocean near American Samoa.
South Korea's Kospi average rose 0.8 percent to a four-week high, with financials rallying after ECB signalled it would buy more government bonds. Both KB Financial and Hana Financial rose over 2 percent each, while market heavyweight Samsung Electronics soared 3.4 percent to a two-and-a-half month closing high.
Shares of mobile service provider KT Corp tumbled 3 percent after police arrested two computer programmers for hacking personal data of about 8.7 million KT subscribers.
Elsewhere, India's benchmark Sensex was last trading up 1.5 percent, Indonesia's Jakarta Composite index rose 0.4 percent, Malaysia's KLSE Composite gained half a percent, Singapore's Straits Times index added a percent and the Taiwan's Weighted average ended half a percent higher.
U.S. stocks rallied on Friday, adding to the strong gains posted in the previous session, as investors reacted positively to some relatively upbeat U.S. GDP data as well as the latest news out of Europe. The Dow rose 1.5 percent, the tech-heavy Nasdaq rallied 2.2 percent and the S&P 500 advanced 1.9 percent.
The release of a report from the Commerce Department showed that the pace of U.S. economic growth increased by 1.5 percent in the second quarter compared to an upwardly revised 2.0 increase in the first quarter. While the report points to continued economic growth, analysts noted that the slowdown still leaves the door open for further stimulus from the Federal Reserve.
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