Japan leads Asia stock gains on central bank stimulus hopes

HONG KONG (AP) - Japanese stocks rallied Thursday as the latest economic data spurred hopes for more central bank stimulus, leading gains in other Asian benchmarks after the Fed left interest rates unchanged.

KEEPING SCORE: Japan's benchmark Nikkei 225 index rose 1.6 percent to 17,561.29 but South Korea's Kospi dipped 0.1 percent to 2,012.35. Hong Kong's Hang Seng index gained 1.2 percent to 21,611.16 while the Shanghai Composite Index in mainland China was flat at 2,952.75. Australia's S&P/ASX 200 added 0.6 percent to 5,218.30. Taiwan's benchmark fell while those in New Zealand and Southeast Asia rose.

JAPAN POLICY: Investors are looking forward to a policy statement by the Bank of Japan after its monthly meeting. Many hope policymakers will act to stimulate the sluggish economy. The latest official figures revealed weak inflation and consumer spending for March even as factory output rose. That indicates lack of confidence among households whose buying power holds the key to sustained growth, adding to the case that the central bank could tweak its already lavish monetary stimulus to further prop up the recovery in Asia's second-largest economy.

MARKET INSIGHT: "All focus will be on the (Japanese) central bank with more easing expected," Alex Furber of CMC Markets in Singapore said in a note to clients. "Trading is likely to remain cautious ahead of the meeting with a sell-off in Japanese equities possible if no steps are taken to ease further."

FED ON HOLD : The U.S. central bank offered few surprises for investors in its latest policy statement, saying it would keep a key interest rate unchanged while revealing no clues as to when its next rate hike might occur. The Fed said that the United States is seeing solid job gains while noting economic activity appears to be slowing and expressed less alarm about the global economy than it had at its previous meeting in March.

WALL STREET: Major U.S. benchmarks had a mixed finish. The Dow Jones industrial average picked up 0.3 percent to 18,041.55. The Standard & Poor's 500 index rose 0.2 percent to 2,095.15. The Nasdaq composite index dropped 0.5 percent to 4,863.14.

ENERGY: Benchmark U.S. crude oil fell after hitting its highest level this year, slipping 14 cents to $45.19 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.29, or 2.9 percent, to settle at $45.33 a barrel on Wednesday, which was its highest price since December. Brent crude, the international standard, lost 47 cents to $46.71 a barrel in London.

CURRENCIES: The dollar strengthened to 111.73 yen from 111.53 yen. The euro slipped to $1.1302 from $1.1325.