( Reuters )- Stocks in Asia rose 3 percent on Friday as a U.S. tax stimulus package, reassuring jobs data and the prospect of another Federal Reserve rate cut eased fears the world's top economy will slide into recession.
Banking shares shrugged off a $7 billion rogue trader scandal at French bank Societe Generale (SOGN.PA) and energy stocks also jumped as oil prices recovered on ebbing recession fears.
Japanese government bond futures slid a half-point, taking a hit from a third straight day of gains in the Nikkei (.N225) while gold climbed to near an all-time high and platinum hit another record.
Global stock markets tumbled earlier this week as fears mounted that the world's top economy was heading towards recession, before recovering on hopes U.S. policy makers were acting to blunt the worst effects of a slowdown.
"The economic stimulus plan, combined with steep U.S. rates cut and expectations for further cuts this month, is helping put out an imminent fire," said Park Seung-hun , an analyst at Woori Investment & Securities said in Seoul.
President George W. Bush and congressional leaders agreed on Thursday on a $150 billion package of tax rebates and business incentives meant to ward off a recession in the world's largest economy.
Although the idea did little to revive Wall Street on Friday when it was touted last week, the fact that an swift agreement was met gave investors confidence, as did weekly U.S. jobless claims, which fell to a four-month low.
Stocks in Tokyo, Sydney and Seoul added 1.5 to 3.5 percent to claw back all or much of this week's losses. MSCI's index of Asia Pacific stocks excluding Japan rose 3.3 percent by 0256 GMT, paring year-to-date losses to around 10 percent.
Banks, such as Japan's Mitsubishi UFJ Financial Group (8306.T) and Australia's Macquarie Group (MQG.AX) shrugged off news that a trader at Societe Generale was accused of racking up a $7 billion loss in bad bets on stocks in the biggest trading scandal in banking history.
France's prime minister reassured investors that SocGen's woes were isolated from the malaise sweeping global financial market after a meltdown in U.S. sub-prime credit markets.
Shares in SocGen fell a modest 4 percent as the bank moved to shore itself up with a fully underwritten rights issue.
The financial sector also drew support from news that troubled U.S. bond insurer Ambac may be in talks with a buyer.
On Wall Street, the Dow Jones industrial average (.DJI) rose just under 1 percent on Thursday. U.S. stock index futures pointed to further gains later.
Tokyo's Nikkei (.N225) was up 2.8 percent at the midsession , a weaker yen boosting exporters like Nissan Motor Corp (7201.T).
In Hong Kong, gains in global bank HSBC (0005.HK) (HSBA.L) helped the Hang Seng notch up a 5 percent gain, while Australian shares (.AXJO) climbed 3.6 percent to complete a clawback of all of this week's losses.
"The panic's gone out of the market," said Angus Gluskie , portfolio manager with White Funds Management.
Expectations of a further interest rate cut by the U.S. Federal Reserve next week has helped to stabilize market sentiment and put focus on fundamental company valuations following the market rout earlier this week, he said.
"On most people's fundamentals, a lot of stocks in the market appear to be undervalued," said Gluskie .
Japanese government bonds tumbled for a third straight day, taking a hit from the solid gains in stocks that cooled some of the expectations for a Bank of Japan interest rate cut this year.
March 10-year futures fell 0.66 point to 137.60 and were well below a 28-month high of 139.15 reached on Tuesday in evening trade.
The benchmark 10-year bond yield jumped 6 basis points to 1.445 percent.
The euro tiptoed higher, supported after tough inflation talk from a European Central Bank official dashed speculation of a possible euro-zone interest rate cut, even as the Federal Reserve is expected to slash rates further. The euro traded at $1.4766 against the dollar.
The dollar meanwhile hovered around 107.22 yen, holding gains made on Thursday after recovering from tumble to a 2-1/2-year low around 104.95 yen earlier in the week.
U.S. crude rose 49 cents to $89.90 a barrel after jumping nearly 3 percent in the previous session to $89.41 a barrel.
Spot gold changed hands at $908.50 an ounce, near a historic high, on dollar weakness, supply concerns, firm oil and expectations of more U.S. interest rate cuts. Platinum hit another record high of $1,618.50.