Nikkei Outperforms Asia to End Quarter Up 10%
Japanese stocks finished the second-quarter on a strong note after a raft of positive economic data on Friday showed a continued pickup in Japan's economy, powering the benchmark index more than 3 percent higher.
Sentiment in the rest of Asia also rose after speeches from Federal Reserve policymakers hinted that U.S. monetary stimulus would not be fading anytime soon. Seoul shares hit a new one-week high, the Shanghai Composite rose 1.5 percent, but Australia's S&P ASX 200 pared early gains to close flat.
For the April-June quarter, the Nikkei was Asia's best-performing index with gains of 10 percent. China markets led the losses with the Shanghai Composite falling 11 percent, while both the Kospi and the Hang Seng Index lost 7 percent each.
Fed Fears Ease
New York Federal Reserve Bank President William Dudley said the Federal Reserve's asset purchases could increase aggressively if economic growth and the labor market turn out weaker than expected. The supportive comments sent the Dow Jones Industrial Average to post its third session of triple-digit gains.
"Central banks everywhere are designed to provide more accommodation and that has led to a lot of liquidity and a huge rise in asset prices, which isn't really supported by global growth and fundamentals, and that's a recipe for volatility," said Jason Brady, managing director & head of fixed-income at Thornburg Investment Management.
Nikkei Rallies 3.5%
Japan's benchmark stock index crossed the 13,600 mark to hit a three-week high on the back of positive economic reports. May consumer prices stopped falling for the first time in seven months, while industrial output and retail sales came in much stronger than expected.
"We had better job market numbers, better production numbers and even consumer prices are picking up. So data-wise, today [Friday] is a pretty good day for Japan," said Takuji Okubo, principal & chief economist, Japan Macro Advisors.
Meanwhile, a weaker yen also underpinned gains. The yen declined to 98.85 per U.S dollar, boosting exporters across the board. Consumer electronics makers Sharp increased 8 percent while Panasonic jumped nearly 7 percent.
Shanghai Jumps 1.5%
A strong rebound in property and financials led China's benchmark stock index higher while comments from China's central bank allayed fears over a cash squeeze.
Real estate shares led the gains with Vanke up 8 percent and China Merchants Property rising 7 percent as investors went bargain hunting.
On Friday, People's Bank of China (PBOC) Governor Zhou Xiaochan reiterated its message that it would adjust liquidity in the banking system to ensure stability in financial markets. The PBOC allowed short-term borrowing costs to hit record highs last week to crack down on banks racking up excessive credit growth
China Merchants Bank and Pudong Development Bank increased 6 and 5 percent, respectively while China Minsheng Bank added 4 percent.
Australia Ends Flat
Sydney's benchmark index traded in a narrow range of 4,800 to 4,833 thanks to a decline in resources after copper prices eyed its biggest quarterly loss in nearly two years. Miner CuDeco skidded 11.5 percent.
Gold miner Kingsgate Consolidated declined 7 percent after warning that it will write down the value of one of its two operating mines by roughly $277 million.
(Read More: Gold Crashes Through Production Cost Levels)
Meanwhile, shares of refiner Caltex slumped 12 percent after issuing a profit warning for first-half earnings, citing a weaker Australian dollar as a factor.
Kospi Up 1.5%
Seoul shares crosses the 1,860 level to a new one-week high, extending the previous day's sharp 3 percent rally, led by a strong bounce in automakers.
Hyundai Motor rallied 3.4 percent while Kia Motor jumped 1.6 percent. Ssangyong Motor rallied 4 percent.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC