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Nikkei leads Asia higher on US data and global stimulus outlook

Asian stocks rallied on Friday, with Japan leading gains by over 3 percent as investors cheered robust global economic data and a commitment to easy monetary policy from global central banks.

Japan's benchmark Nikkei hit a one-week high while Australia's S&P ASX 200 index rose to a ten-week high. The Shanghai Composite and South Korea's Kospi however, pared gains to end below their respective session highs.

Symbol
Name
Price
 
Change
%Change
NIKKEI
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HSI
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ASX 200
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SHANGHAI
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KOSPI
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CNBC 100
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Wall Street's boost

U.S. stocks soared to fresh closing highs on the first day of August, pushing the S&P 500 above the 1,700 mark for the first time after the pace of growth in the U.S. manufacturing sector accelerated in July to the highest level since June 2011. In Europe, manufacturing activity grew for the first time in two years in July.

Meanwhile, the European Central Bank (ECB) and the Bank of England (BOE) both left interest rates at record lows on Thursday, a day after the Federal Reserve said that the U.S. economy still needed it's support.

Investors are awaiting Friday's widely-watched U.S job report. Analysts polled by Reuters expect to see a gain of 184,000 in July, after a 195,000 uptick in the previous month.

Nikkei rallies 3.3%

Japan's benchmark index hit its highest level since last Thursday as dollar-yen flirted with the key 100-yen level and on the heels of positive earnings results.

Mitsubishi jumped 4 percent after posting a 15 percent rise in net profit. Sony added 1 percent after eking out a quarterly net profit after last year's loss, but warned that its electronics division faces difficult times ahead.

Meanwhile, Sharp rose 3.4 percent after reporting a smaller net loss for the April-June period from the year earlier and Suzuki Motor jumped 5.8 percent after posting a 15 percent rise in the fiscal first-quarter net profit.

Toyota added over 3 percent ahead of posting results after the market-close.

(Read more: Will Southeast Asia get in the way of Toyota's profits?)

Shanghai ends flat

China's benchmark index pared gains after rising above 2,030 points to hit a one-week high. Property stocks rallied for a fourth-straight session as investors dismissed recent cooling measures by the government to lower home prices

China Merchants Property and Poly Real Estate led gains by 3.6 percent each.

The nation's top four lenders were marginally lower after a report from the Shanghai Security News saying that new loan issuance may have hit record lows in July due to weak demand. Agricultural Bank of China lost nearly 1 percent.

Sentiment rose on the back of Thursday's official purchasing manager's index (PMI) figure, which climbed above the key 50 threshold that demarcates expansion from contraction.

Sydney 1% higher

Australia's benchmark index held onto its two-and-a-half-month high even after the government cut its economic growth and revenue forecasts. Speaking at a pre-election budget update, Treasurer Chris Bowen said that growth would fall to 2.5 percent for the current financial year, down from May's forecast of 2.75 percent.

The index remained above 5,100 points, it's highest level since May 23 while the Australian dollar pared losses to rise above 89 U.S. cents. Earlier in the session, the currency fell below those levels to plumb a new three-year low.

"The market is a little bit on the short side. If the payrolls number disappoints, we could see a stronger Aussie. It's really set with what's going on with the U.S. dollar and if we see renewed weakening of that currency, we'll see the Aussie back up," said Stephen Nash, director of strategy and market development at FIIG Securities.

(Read more: It seems the only way is down for the Aussie)

Banking stocks held onto gains after the government confirmed that a levy on bank deposits will be enforced starting in 2016. Macquarie rose 4 percent while Australia New Zealand Banking jumped 1.8 percent.

After rallying over 5 percent for the month of July, the S&P ASX 200's Relative Strength Index (RSI) currently stands at 70, compared to 48 a month earlier. Traders say the 70 level indicates overbought territory, meaning that the index may be getting overvalued.

Kospi up 0.1%

Seoul's benchmark index ended just below fresh multi-week highs. The index rose above 1,25 points earlier in the session to its highest level since June 11, one day after hitting a seven-week closing high. The Kospi ended within range of it's 200-day simple moving average (SMA) of 1,943 points.

Automakers Hyundai Motor ended flat following a 3 percent spike after reporting 6.4 percent rise in U.S. sales for the month of July from a year earlier.

Samsung Electronics added half a percent after the U.S. International Trade Commission said on Thursday that it would delay a decision on whether some Samsung devices infringed on Apple patents.

Samsung Engineering jumped as much as 7 percent after its CEO was fired on Thursday following an accident at one of the firm's sites last week.

By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC