Volkswacht Bodensee - Hong Kong, Shanghai rally as most markets track Wall St record

The yen sat around two-month lows after taking a hit in the wake of minutes showing Federal Reserve decision-makers were split on last month's bumper interest rate cut and a top official sparking questions about how many more could be in the pipeline.

Chinese investors were settling down after a volatile start to the week that saw mainland and Hong Kong markets whipsaw as the euphoria over last month's stimulus was dampened by a news conference that failed to unveil more measures or give details on those already announced.

Traders welcomed news that the People's Bank of China had released details of a "swap facility" that will allow "qualified securities, funds and insurance companies" to access more than $70 billion in liquidity to purchase equities.

The move, one of a number of measures announced last month, helped Shanghai rise more than one percent, having dived more than six percent Wednesday -- its worst day in more than four years.

Hong Kong rose three percent, building on the previous day's advance that followed a plunge of more than nine percent, its heftiest in 16 years. The Hang Seng Index is closed on Friday for a holiday.

Dealers are now keenly awaiting a finance ministry news conference on fiscal policy on Saturday, although observers warned the bar would be high for Finance Minister Lan Fo'an if he is to get the recent market rally back on track.

Richard Tang, China strategist and head of research for Hong Kong at Julius Baer, said: "Market disappointment at (Tuesday's briefing) helps investors lower their elevated expectations for the policy measures."

"We believe the consensus is expecting around 2-3 trillion yuan... of fiscal stimulus measures," he said.

"The market had generally baked in expectations of some sorts of cash handouts to the underprivileged and/or consumption vouchers, policies to help relieve the funding challenges of local governments at least temporarily, and more policies to address the housing inventory problem."

The gains led a rally across Asia, which came after the Dow and S&P 500 chalked up fresh records on Wall Street thanks to a burst from tech giants including Amazon and Apple.

Sydney, Seoul, Mumbai and Bangkok advanced, while Singapore, Manila, Wellington and Jakarta edged down. London was up but Paris and Frankfurt fell.

Tokyo was boosted by a drop in the yen fuelled by minutes from the Fed's September meeting, where it cut rates by 50 basis points but saw officials split on the decision.

They showed that while the move was ultimately supported by an 11-1 vote, some "noted that there had been a plausible case for a 25 basis point rate cut at the previous meeting".

"Some participants observed that they would have preferred a 25 basis point reduction of the target range at this meeting, and a few others indicated that they could have supported such a decision," the minutes said.

However, San Francisco Fed President Mary Daly said she had backed the big cut in order to "recalibrate" monetary policy, adding that "two more cuts this year, or one more cut this year, really spans the range of what is likely in my mind, given my projection for the economy".

But she warned the bank would remain "data-dependent".

Focus now turns to the release of consumer price inflation later in the day and wholesale prices on Friday.

- Key figures around 0810 GMT -

Shanghai - Composite: UP 1.3 percent at 3,301.93 (close)

Hong Kong - Hang Seng Index: UP 3.0 percent at 21,251.98 (close)

Tokyo - Nikkei 225: UP 0.3 percent at 39,380.89 (close)

London - FTSE 100: UP 0.1 percent at 8,248.54

West Texas Intermediate: UP 0.8 percent at $73.81 per barrel

Brent North Sea Crude: UP 0.7 percent at $77.13 per barrel

Dollar/yen: DOWN at 149.11 yen from 149.35 yen on Wednesday

Euro/dollar: DOWN at 1.0937 from $1.0940

Pound/dollar: UP at $1.3078 from $1.3062

Euro/pound: DOWN at 83.63 pence from 83.72 pence

New York - Dow: UP 1.0 percent at 42,512.00 (close)

L.Stucki--VB