Shares in Asia gain as China pledges to use fiscal policy on growth

Investing.com - Shares in China gained on Friday as Minister of Finance Lou Jiwei will "increase the intensity of fiscal policy to ensure economic growth."

He said that China needs to "steady deleveraging" while avoiding a sharp economic slowdown. Fiscal policy needs to remain proactive, noting global deflation and the still-uncertain recovery of the world economy, including the U.S.

China's National People's Congress annual legislative assembly began this week with the government forecasting a slowdown in growth to 7% in 2015 from 7.4% last year. At the weekend, the People's Bank of China cut interest rates, as did the Reserve Bank of India earlier this week.

The Shanghai Composite gained 0.76% by midday after the remarks. In Tokyo, the Nikkei 225 was up 1.01% in a quiet regional data day.

Traders awaited the release of Friday's monthly job report for the month of February. On Thursday, the U.S. Labor Department said the number of Americans filing new claims for unemployment increased to the highest level since May. Unemployment filings for the week that ended Feb. 28 rose by 7,000 last week to a seasonally-adjusted total of 320,000.

Overnight, U.S. stocks were higher after the close on Thursday, as gains in the Utilities, Health Care and Financials sectors led shares higher.

At the close in New York, the Dow Jones Industrial Average rose 0.21%, while the S&P 500 index added 0.12%, and the NASDAQ Composite index climbed 0.32%.

Also on Thursday, European Central Bank president Mario Draghi announced that it would begin its highly anticipated quantitative easing program on March 9.

Draghi reiterated that the €60 billion a month program could last until September, 2016 or beyond if the central bank does not approach its target inflation rate of 2%.

Bond buying programs, such as quantitative easing, are pursued by policymakers as a way of stimulating the economy by driving up the market price of bonds. When bond prices increase, yields decrease lowering the rates for mortgages and other loans. If bond prices increase dramatically in the coming months, investors could consider gold as an alternative.