Asian stocks pushed back towards a six-month high Thursday as technology shares resumed their rally, while Japan's surprisingly big stimulus spending and signs of stabilizing economic activity drove up government bond yields.
Shares in tech-heavy Taiwan -- one of the best performing stock markets in the world this year -- led the rise in Asia as companies such as contract chipmaker UMC jumped 6 percent on signs of improving demand. Japan's Elpida Memory rose 7.8 percent and South Korea's Samsung Electronics gained 4 percent.
Trading activity was limited as many investors prepare to take time off for Easter holidays around the world. Markets in Australia, Hong Kong and Singapore are closed Friday.
The U.S. dollar was little changed against the the yen and the euro , while oil futures were trading higher, just above $50 a barrel.
The Japanese spending packagewill target eco-friendly electronics, giving a boost to shares of companies such as Sony and Panasonic. But the rally in shares, worries about bond supply and signs some central banks may have finished cutting interest rates kept pushing up bond yields and swap rates across the region -- complicating the efforts of central banks to keep credit cheap.
Some economic data around the region also provided hope for a recovery. Japanese core machinery orders posted a surprising increase of 1.4 percent in February from the previous month, while business surveys in China suggested the economy is steadying. China remains the economic engine helping offset the collapse in exports across Asia thanks to its nearly $600 billion stimulus spending, which has spurred orders for technology goods across Asia.
Japan's Nikkei 225 Average climbed 3.7 percent to a three-month closing high, with Sony and other electronics firms cheered by an economic stimulus plan that spurred hopes of increased consumer spending.
South Korea's KOSPI closed up 4.3 percent, at a 6-month high, with financials leading gains on growing economic optimism fueled by positive central bank comments, but HynixSeminconductor underperformed on its rights issuance plans. The Bank of Korea kept rates on hold at 2 percent, a record low, and said there was still room to cut rates, even while saying the economy was leveling off after its rapid decline.
Australian stocks finished 1.4 percent higher as banks gained on hopes a U.S. government
rescue package for life insurance companies would boost global financial markets, and as resources stocks benefited from strong commodities prices.
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Hong Kong shares rose 3 percent, rebounding from a two-day sell-off, buoyed by gains across the region while loss-hit CITIC Pacific picked up steam after a major management reshuffle. Shares in Ping An Insurance, the world's second-largest insurer by market value, jumped 7.7 percent as investors shrugged off its weak fourth quarter and instead focused on its more upbeat 2009 outlook.
Singapore's Straits Times Index was up 2.5 percent. Shares of Ezra Holdings rose as much as 15 percent at one point after it posted a 21 percent jump in second-quarter profits on firm demand for offshore support vessels despite the weak global economic outlook.
China's Shanghai Composite Index ended 1.4 percent higher, with Ping An Insurance gaining after announcing fourth-quarter results, lifting financial shares, while coal shares were soft.