Shares advanced in Asia on Friday after Wall Street rallied to its best day since January and the Bank of Japan kept its ultra-lax monetary policy unchanged.
In its first policy meeting under its new governor, Kazuo Ueda, the BOJ kept its key policy rate at minus 0.1% even as Japan reported inflation excluding volatile fresh food costs was at 3.5% in March.
Japan's central bank has overshot its inflation target of 2%, but expects conditions to worsen since the U.S. and other major economies are thought to be headed for recession.
“With extremely high uncertainties surrounding economies and financial markets at home and abroad, the bank will patiently continue with monetary easing while nimbly responding to developments,” the BOJ said in a statement.
The central bank did remove its “forward guidance” that pledged to keep key policy interest rates at current or lower levels. It said it would needs up to 18 months to to conduct a review of monetary policy guidance.
The dollar rose sharply against the Japanese yen, to 134.96 yen from 133.96 yen earlier in the day.
Tokyo's Nikkei 225 index added 1.3% to 28,822.96 and the Hang Seng in Hong Kong gained 0.6% to 19,959.93
The Shanghai Composite index surged 0.7% to 3,309.46, while the S&P/ASX 200 in Sydney edged 0.2% higher to 7,306.30.
The Kospi in Seoul edged 0.1% higher, to 2,498.32. India's Sensex added 0.1% and benchmarks in Southeast Asia fell.
On Thursday, U.S. benchmarks advanced after Meta Platforms became the latest Big Tech company to blow past profit forecasts.
The S&P 500 rose 2% to 4,135.35 and the Dow rose 1.6% to 33,826.16. The U.S. economy slowed more than expected in January-March, but showed signs of resilience.
The Nasdaq composite led the market with a 2.4% gain, to 12,142.24.
Facebook’s parent company did some of the heaviest lifting, jumping 13.9%. Meta beat analysts’ estimates for profit during the first three months of the year and also gave a forecast for revenue that topped expectations.
It joined Microsoft and Alphabet, which reported better-than-expected results earlier in the week, and Amazon followed suit after trading closed for the day. They're among the most influential stocks on Wall Street indexes because they're some of the biggest.
A report on Thursday gave the first indication of just how much the U.S. economy is slowing: down to an estimated 1.1% growth at an annual rate during the first three months of 2023 from 2.6% at the end of last year. That was worse than expected, but the economy may be in better shape than it looks, since growth in spending by consumers and other areas accelerated and much of the weakness was related to businesses thinning out inventories.
A measure of inflation that the Fed likes to use, however, came in hotter than hoped.
A separate report showed that fewer workers applied for unemployment benefits last week, raising hopes that the job market may remain resilient as other areas slow.
Investors took the data to mean the Federal Reserve next week will see the economy is still strong enough to handle another hike to interest rates at its next meeting.
The Fed has been raising rates at a furious pace since early last year, up to the highest level since 2007 from its record low to try to get price increases under control.
But high rates slow the entire economy and hurt prices for investments. They've hit some areas of the economy particularly hard, including the housing and manufacturing industries.
Many investors are preparing for a possible recession this year, which could mean further hits to corporate profits.
Caterpillar, considered a bellwether for the global economy, slipped 0.9% despite reporting stronger profit and revenue for the latest quarter than expected.
In other trading Friday, U.S. benchmark crude oil added 49 cents to $75.25 per barrel in electronic trading on the New York Mercantile Exchange. It gained 46 cents to $74.76 per barrel on Thursday.
Brent crude, the international standard, picked up 52 cents to $78.74 per barrel.
The euro slipped to $1.1016 from $1.1026.