European stocks rose, with the Stoxx Europe 600 Index rallying to a 4 1/2-year high, amid speculation that central banks around the world will continue with measures to support economic recovery.

Federal Reserve Vice Chairman Janet Yellen said yesterday the U.S. central bank should press on with its $85-billion monthly bond purchases. Yellen echoed Chairman Ben S. Bernanke’s comment last week that the benefits of the Fed’s low interest rates and $3.1 trillion balance sheet outweigh any risk of financial instability.

In Asia, Kikuo Iwata, a nominee for deputy governor at the Bank of Japan, said the monetary authority should buy longer- term bonds to help it achieve a 2 percent inflation target.

China plans to raise its budget deficit by 50 percent this year as the government cuts taxes and boosts measures to support consumer demand in the world’s second-biggest economy. Premier Wen Jiabao set a growth target of 7.5 percent for 2013.

In the euro area, officials indicated that budget policies may be eased after a backlash against austerity plans.

Economic strains may “justify in a certain number of cases reviewing deadlines for the correction of excessive deficits,” European Union Economic and Monetary Commissioner Olli Rehn told reporters late yesterday.

National benchmark indexes climbed in all of the 18 western European markets except Greece. France’s CAC 40 rose 2.1 percent. The U.K.’s FTSE 100 gained 1.4 percent. Germany’s DAX added 2.3 percent.

Standard Chartered climbed 3.2 percent to 1,837.5 pence, the highest price since December 2010. Britain’s second-largest lender by market value said pretax profit rose to $6.88 billion from $6.78 billion a year earlier. That beat the $6.84 billion estimate of analysts.

Serco rallied 8.9 percent to 630.5 pence, the biggest jump since September 2003. The U.K. services company that operates prisons and London’s Docklands Light Railway posted 6 percent growth in adjusted pretax profit and increased the dividend 20 percent to 10.1 pence.

Roche Holding AG, the world’s largest maker of cancer drugs, gained 1.4 percent to 218.30 Swiss francs, the highest price since October 2007. The company obtained European Union approval for its breast-cancer drug Perjeta. Separately, Chief Executive Officer Severin Schwan confirmed the company’s 2013 sales and earnings forecasts and said he expects Roche will be able to raise its dividend for this year.

Deutsche Post AG increased 5.8 percent to 17.99 euros, the highest price since June 2008. Europe’s biggest postal service said fourth-quarter net income totaled 542 million euros ($707 million), topping the average 482 million-euro analyst forecast. The company said it expects 2013 earnings before interest and taxes in the range of 2.70 billion euros to 2.95 billion euros. That compared with the average analyst estimate calling for 2.87 billion euros.