Asian stock markets advanced for a second day yesterday, with Tokyo's index up nearly 2 percent, on cautious optimism that government efforts to heal the financial system will reinvigorate the flagging world economy. European markets opened higher.

Still, lackluster trade through most of Asia's session outside its two biggest markets - Japan and Hong Kong - reflected lingering uncertainty after a rally last week triggered by upbeat news about Citigroup and other top US banks.

Confidence continued to show signs of improving yesterday as Japanese financial stocks surged on reports the country's central bank may buy their subordinated loans and bonds to bolster their capital. In Europe, British lender Barclays PLC became the latest major bank to say it had a good start to 2009.