Japanese and Hong Kong share markets led Asian stocks higher on Wednesday, with the Chinese central bank's weekend move to free up more liquidity boosting sentiment as the world's second-largest economy grows at a steady pace.

Across Asia this week, trade has been generally subdued and volumes thin with China and South Korea closed for week-long holidays and analysts cautioned against reading too much into index moves.

Japan's Nikkei climbed to a more than two-year peak while Hong Kong's Hang Seng Index set a 2-1/2 year high. The Philippines Stock Exchange added 0.5 per cent to a record high.

Equities have been underpinned by upbeat global data, including strong manufacturing activity across much of Asia, Europe and the United States, largely reflecting a broad export boom.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.3 per cent to extend three consecutive days of gains. "Japanese stocks are rising as part of a broader ongoing trend in global equities generated by an improvement in economic prospects,” said Soichiro Monji, chief strategist at Daiwa SB Investments.

China eases reserve requirement

The Chinese central bank on Saturday added to the upbeat mood for domestic and global growth, cutting the amount of cash that some banks must hold as reserves for the first time since February 2016.

Growth in China, the world's no. 2 economy, has held up remarkably well this year despite curbs on the property market and risky forms of lending, thanks to a construction-boom and upsurge in exports.

Analysts said the move by the People's Bank of China should support banks' net interest margins and profit growth in 2018.

Predictably, financials lifted the Hong Kong China Enterprises Index, a proxy for China plays, which soared to a level not seen since August 2015. China Construction Bank and Industrial and Commercial Bank of China among top gainers.

Global growth, auto sales

Asia already had a strong tailwind from buoyant US shares, with the three major stock indices on Wall Street closing at record highs on Tuesday, driven by expectations of strong global growth and a surge in auto sales.

Car sales in the world's biggest economy surged at the fastest rate in 12 years with the annual rate for all light vehicles at 18.57 million units in September, up from 16.14 million the previous month.

Replacing cars in hurricane-hit parts of Texas and Florida will boost new and used auto sales through at least November, according to industry consultants.

That will hoist retail sales, adding to the country's gross domestic product and more than offsetting the drag from damage done by the hurricanes, analysts said.

The foreign exchange market is at a crossroad with uncertainty over the likely successor of Fed Chair Janet Yellen whose term ends in February. Fed Governor Jerome Powell has joined the race for the job alongside his predecessor Kevin Warsh.

“The market is still seeing Warsh as a favourite but the odds for Powell have improved. Powell is perceived as being a relatively dovish choice compared to Warsh,” said Ray Attrill, Sydney-based global co-head of forex strategy at NAB.

As a result, Treasury yields headed lower to 2.3320 per cent from a three-month peak of 2.3710.

The dollar eased 0.2 per cent on the yen to 112.66. The dollar index, which tracks the greenback against a basket of six major currencies, slipped 0.18 per cent to 93.405.

Catalonia referendum

Elsewhere, investors remained cautious over Catalonia's vote to separate from Spain with the region's secessionist leader saying he would declare independence “in a matter of days".

“The Constitutional Court is likely to challenge and rule against such a motion,” analysts at Citi wrote in a note.

“If the Catalan government ignores the ruling, then Madrid is likely to trigger article 155 of the Constitution to strip out Catalonia's autonomy and to call for regional elections.”

Catalans had come out in hordes to vote for independence on Sunday in a referendum that was declared illegal by Spain's central government.

In commodities, US crude dipped 0.75 percent at $50.04 a barrel. Brent crude fell to $55.62 per barrel. Gold was slightly higher with spot gold at $1275.21 per ounce.

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