Asian markets mostly rose for a third successive day on Thursday, posting strong gains on hopes for stimulus measures in the United States and Europe as well as promises of help for Spain's banks.
The euro also held up against the yen and US dollar after impressive gains in New York late Wednesday, with dealers feeling a little more confident European leaders can navigate the long-running crisis.
Tokyo closed 1.24 per cent, or 106.19 points, higher at 8,639.72, while Seoul soared 2.56 per cent, or 46.10 points, to 1,847.95, and Sydney rose 1.31 per cent, adding 53.3 points, to 4,108.6.
In the afternoon Hong Kong rose 0.85 per cent, or 157.76 points, to 18,678.29 but Shanghai closed 0.71 per cent lower, shedding 16.43 points to 2,293.13 owing to nervousness ahead of the release of key economic data at the weekend.
Regional investors followed the lead of their counterparts in Europe and the United States.
While a decision by the European Central Bank to keep rates on hold disappointed investors, its head Mario Draghi said some governors on the policy committee had wanted a cut.
He added that Wednesday's decision was "taken by very broad consensus" - which analysts took to mean that there could be a reduction next month.
The bank also said it would keep cash flowing to the 17-nation eurozone's embattled banks, at least through year-end.
The likelihood of another round of stimulus in the United States rose again as the Fed looks to head off the effects of the European slump on the world's number one economy.
Dennis Lockhart, President of the Atlanta Federal Reserve, said the central bank might need to consider more easing if economic growth there hits more roadblocks, days after another poor batch of jobs growth data.
He said if domestic growth is no longer possible "further monetary actions to support the recovery will certainly need to be considered", while the Fed rate-setting committee needs to be ready to respond to economic instability.
"The market is starting to price in additional policy response, and there is a greater expectation that something might happen before the Greek election (on June 17)," Tim Schroeders, fund manager, at Pengana Capital in Australia, told Dow Jones Newswires.
Eyes will now be on Fed Chairman Ben Bernanke's testimony on the US economic outlook later in the day for clues to the bank's response.
On currency markets the euro rose after successful bonds auctions in Spain and France, indicating a little more confidence among investors.
The common currency fetched $1.2581 and ¥99.96 in early European trade, compared with $1.2580 and ¥99.63 in New York late Wednesday.
It had been sitting at $1.2490 and ¥98.60 in Asia earlier on Wednesday.
The dollar was at ¥79.44 Thursday, against ¥79.20.
Oil was also lower in late afternoon trade. New York's main contract, light sweet crude for delivery in July, was down 15 cents to $84.87 a barrel in the late afternoon and Brent North Sea crude for July delivery fell 52 cents to $100.12.
Gold was at $1,625.33 an ounce at 1200 GMT, compared with $1,635.50 late Wednesday.
In other markets:
-- Singapore closed flat, edging down 1.57 points to 2,759.26.
Real estate developer Capitaland was up 0.39 per cent at Sg$2.59 while Singapore Airlines fell 0.20 per cent to Sg$10.19.
-- Taipei gained 0.34 per cent, or 24.16 points, to 7,080.31.
-- Manila closed 1.14 per cent, or 56.37 points, higher at 5,022.95.
-- Wellington closed 0.27 per cent, or 9.44 points, higher at 3,273.96.
Auckland Airport rose 0.8 per cent to NZ$2.53, Telecom climbed 1.01 per cent to NZ$2.50 and Contact Energy was up 0.42 per cent at NZ$4.76, while Fletcher Building eased 0.16 per cent to NZ$6.29.
-- Kuala Lumpur rose 0.37 per cent, or 5.88 points, to 1,575.31.
Budget carrier AirAsia added 1.93 per cent to 3.70 ringgit, financial firm CIMB Group Holdings gained 0.13 per cent to 7.50 ringgit and utility Tenaga Nasional lost 0.62 per cent to 6.39 ringgit.
-- Jakarta was almost unchanged, nudging down 0.74 points to 3,840.60.
-- Bangkok was flat, edging up 0.58 points to 1,118.53.
-- Mumbai rose 1.18 per cent, or 194.75 points, to 16,649.05.
