After the post-decision press conference Thursday, markets reacted negatively to the easing measures, strengthening the euro and pushing stocks down. Initially, Asian markets tracked that mood, but sentiment later turned and many erased losses.
Angus Nicholson, a market analyst at IG, wrote in an afternoon note, "Despite a negative open to the Asian session, cash markets and U.S. and European futures markets have bounced into positive territory in the latter half of the session."
"Debt markets were far more upbeat on the ECB announcement and it appears that the more erratic equities market is now following the calmer lead of the bond market and moving higher," Nicholson added.
Margaret Yang, a market analyst from CMC Markets Singapore, attributed the initial weakness to the ECB decision to a lack of confidence in the economic outlook and in the central bank's ability to raise inflation.
"Plus, the ECB's stimulus was very much anticipated and priced by the market previously, therefore, any bits of surprises could lead to rising volatility," she added in a note Friday morning.
In the currency market, the euro came off the highs it touched after the ECB's announcement. During Asian hours, the euro/dollar pair traded at 1.1174 after rising as high as 1.1217 on Thursday after the decision.
The Japanese yen remained near the 113 handle against the dollar in the second half of the Asian session. The dollar/yen pair traded at 113.47. Exporters in Japan finished mixed, with shares of Toyota off 0.23 percent and Nissan lower by 0.32 percent, while Sony added 0.33 percent. Usually, a stronger yen is a negative for exporters as it reduces their overseas profits when converted into local currency.
Mining stocks in Australia closed mixed, with major miners Rio Tinto off 0.36 percent and BHP Billiton lower by 0.51 percent. Shares of South32 finished up 3.5 percent. Commodity prices retreated from their rally earlier in the week. For example, this week, iron ore hit its highest point for the year at $63.30 a tonne; Friday morning, prices retreated to $57.40 a tonne.
BNP Paribas said in a note Friday that commodities, in particular iron ore, had been a key driver for the Australian market this week in the absence of major data.
"The accelerated rally at the beginning of the week appears to have come from short-covering after the China National Party Congress at the weekend (5-6 March)," the note said, questioning if this move will be long lasting. "It cannot be ignored, especially given the knock on impact it is having on [foreign exchange] and rates markets."
The rally in commodities helped to strengthen the Australian dollar, which was up at $0.75 as of 2:35 p.m. HK/SIN time, off lows of just under $0.71 last month.
The Chinese yuan strengthened against the dollar, with the dollar/yuan pair down 0.21 percent at 6.4935 in the afternoon. Before market open, the People's Bank of China (PBOC) set the yuan mid-point fix at 6.4905, its strongest level in 2016, compared with Thursday's fix of 6.5127.