China, Japan lead Asia shares higher on Yellen bounce
Asian equities rallied for a second straight session on Friday as investors cheered comments from Federal Reserve Vice Chair Janet Yellen that U.S. monetary stimulus would remain in place for now.
Speaking on Thursday at her confirmation hearing before the Senate Banking Committee, Yellen said the central bank is not going to reduce its stimulus program anytime soon. Her dovish comments sent the Dow and the S&P 500 to fresh record highs.
"Yellen said it is important not to remove support too soon and there are dangers of ending QE [quantitative easing] too quickly. It is therefore clear that she will say no to tapering in December. However, the decision in December is not hers but Bernanke's," said Kathy Lien, Managing Director, BK Asset Management.
(Read more: Markets soothed by Yellen, watching data)
Nikkei up 1.8%
(Read more: Is there no stopping Japan's Nikkei?)
Comments from Finance Minister Taro Aso underpinned gains. Speaking on Thursday, he said it was important to keep currency intervention as a policy option, an indication that the government would take action against any tentative strengthening of the yen.
Sony climbed 3.3 percent ahead of its launch of the PlayStation 4 console later on Friday.
Shanghai up 1.7%
Reports that an updated version of China's Third Plenum communique will be released next week sparked hopes for a clearer picture of the government's policy reforms and set the benchmark Shanghai Composite to a one-week high.
Earlier this week, the index fell to a three-month low on disappointment over a lack of specific details announced at the meeting of Community Party leaders.
(Read more: China's IPO freeze may spur wave of asset sales)
Meanwhile, the seven-day repurchase rate, a key gauge of liquidity in the mainland, rose to 5.4 percent after the central bank drained funds from the system on Thursday.
Kospi rallies 1.9%
A rally in large-cap stocks propped up South Korea's benchmark index, helping it close above the key 2,000 level for the first time in a week.
Meanwhile, the Korean won inched up 0.4 percent against the greenback after hitting a three-week low earlier this week.
Sydney up 0.9%
Australia's S&P ASX 200 index widened gains following a quiet open thanks to a rally amid banks. Australia and New Zealand Banking, National Australia Bank,Westpac and Macquarie rose over 1 percent each.
Paladin Energy rose 1.2 percent after reporting a 13 percent rise in quarterly revenue.
GrainCorp fell 4 percent after saying that current earnings could come under pressure due to a drought in certain regions of the country.
Amid emerging markets, Philippine shares added 0.3 percent while the Jakarta Composite dipped 0.7 percent at the close. Indian markets were shut for a public holiday.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter