Asian stocks jump on U.S. Fan/Fred rescue plan

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Reaction in Asian financial markets to Uncle Sam’s Fannie Mae/Freddie Mac rescue tonight is mostly positive.

--- Stock markets are higher across the board. Just before 7 p.m. PDT, a couple of hours into trading, Japan’s Nikkei-225 stock index was up 424 points, or 3.5%, to 12,636. The Taiwan market was up 5.4%, South Korea was up 4.1% and Australia gained 3.9%.

From Bloomberg News: ‘It’s good news for financials everywhere,’ said Saxon Nicholls, Melbourne, Australia-based principal at Herschel Asset Management Ltd., which manages about $500 million. ‘The whole global financial system is so integrated, and Asian central banks are big buyers of Fannie and Freddie’ debt securities.

--- U.S. Treasury bond yields have jumped in electronic trading. In theory, that’s a good sign because it suggests investors are selling super-safe Treasuries to buy riskier securities -- or possibly bonds of Fannie and Freddie. The two-year Treasury note yield has surged to 2.46%, up from 2.31% on Friday.

Treasury yields had slid in recent weeks as the fear level in credit markets had ramped up again.

--- The dollar is mixed after rallying sharply since mid-July. The euro has jumped to $1.442 from $1.424 on Friday. But the dollar is up against the yen, to 108.45 yen from 107.13 on Friday.

Same idea as with Treasuries: The dollar has been a haven for nervous global investors in recent weeks. If fear is receding the dollar stands to give back some of its gains.