Asian stocks rose Friday, with Japan's Nikkei closing almost 3 percent higher, led by chipmakers on expectations a slump in the sector may soon end, while oil prices retreated after testing a record high above $112 a barrel.
The euro inched higher against the dollar, but stayed well off its all-time peak hit on Thursday after European Central Bank President Jean-Claude Trichet expressed concerns about excessive volatility in foreign exchange markets.
Chipmakers in Wall Street had gained on Thursday after Banc of America Securities upgraded the U.S. semiconductor sector, saying a modest inventory buildup has eased, and predicting a bottom for the sector could be near.
Asian chipmakers such as Hynix Semiconductor had already rallied on Thursday following announcements including from Japan's Elpida Memory that it would raise prices for some of its memory chips.
Tokyo's Nikkei 225 Average rose 2.9 percent, with Fast Retailing jumping on a profit outlook upgrade. Japan's second-largest bank Mizuho Financial Group extended gains after disclosing additional subprime-related trading losses, with investors seeing negative news having run its course at least for now.
Seoul stocks closed up 0.85 percent with gains by chipmakers outweighing a 5 percent fall in LG Display, which was hurt by competition worries despite its solid earnings on Thursday.
Australian shares eased 0.1 percent, as Tabcorp and Tatts Group slid on the loss of a key market for their slot machines, while weaker oil and metals prices pressured resource
firms. But financial firms such as Australia and New Zealand Banking Group recovered from a recent sell-off, keeping a lid on losses.
Hong Kong's Hang Seng Index climbed nearly 2 percent, tracking gains in overseas markets, with financial plays leading as Chinese banks flagged rosy profit forecasts.
Investors will be cautious, however, as they await key economic data from China and quarterly results from major U.S. corporates next week to gauge the outlook for the global economy. Chinese banks such as China Merchants Bank, jumped after they estimated sharply higher first-quarter earnings due to higher interest on consumer lending as Beijing grants lenders more flexibility in pricing loans.
Singapore's Straits Times Index was higher, with financial stocks like DBS Group moving forward. Cosco rose as much as 3.2 percent, as Credit Suisse said it expected the stock to outperform. Citi analysts had downgraded the stock to "sell" from "buy" and cut its share price target to S$2.70 from S$4.50, citing margin contraction and slowing order book momentum. But Credit Suisse disagreed and kept its "outperform" rating on Cosco with a target price of S$4.40 as it does not expect changes in its estimates based on the net change in Cosco's order book.
China's Shanghai Composite Index closed 0.6 percent higher, led by financials once again after China Merchants Bank made a strong estimate of first-quarter earnings. CITIC Securities shot up over 5 after estimating first-quarter profit more than doubled. It was suspended on Thursday for a shareholder meeting which approved a big 5 yuan per 10 shares dividend plus a 10 for 10 bonus issue of shares.