Asian equities rose on Thursday after a weaker-than-expected reading on U.S. economic growth reinforced expectations that the Federal Reserve will not raise interest rates anytime soon.
The U.S economy contracted 2.9 percent annually in the first quarter, a much steeper pace than expected, which briefly sent yields on the benchmark 10 year-note to a three-week low. Separately, May durable goods orders unexpectedly declined 1 percent on month while the services sector expanded at its fastest clip in more than four years in June.
"Between the rise in service and manufacturing activity, GDP growth is set for a strong rebound in Q2. Unfortunately the Federal Reserve will want to see how the economy performs in Q3 before getting excited about the recovery. So at the end of the day, the latest economic reports simply validate the central bank's steady and conservative monetary policy stance," said Kathy Lien, managing director of FX strategy for BK Asset Management.
Geopolitical tensions watched
In Iraq, militants seized control of the Joint Base Balad airbase on Wednesday, one of the country's largest, as well as the Ajeel oil site, located east of Tikrit. The attack came as Prime Minister Nuri al-Maliki said he supported the process of forming a new government by July 1st.
Meanwhile in Ukraine, Western powers warned Russia on Wednesday that they may impose new sanctions if Moscow does not take more action to defuse the conflict in east Ukraine.
Nikkei 0.3% higher
Japan's benchmark Nikkei rebounded after closing at a one-week low on Wednesday while the yen moved off a one-week low of 10.6 per dollar.
Rakuten rallied 3 percent on reports that it may be entering the low-cost carrier business next month with Malaysia's AirAsia.
Toyota Motor climbed 0.8 percent after unveiling its first fuel cell electric car on Wednesday, which will go on sale in Japan sometime before April 2015.
Shanghai adds 0.7%
Mainland shares rose after three Chinese firms soared on their Shenzhen debut in the first listings following a four-month hiatus.
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Among the top gainers on the benchmark Shanghai Composite, Jiangxi Copper and Baoshan Steel rose 1.5 and 2.2 percent, respectively.
Hong Kong stocks rallied 1.5 percent before the release of May trade figures.
ASX gains 1.1%
Australia's benchmark index snapped a three-day losing streak while the Australian dollar rose above 94 U.S. cents after hitting a one-week low of $0.9354 previously.
AGL Energy jumped nearly 3 percent after receiving the green light to buy state-owned Macquarie Generation.
Chinese iron ore futures rallied to their highest levels in nearly a month, which lent support to miners; Atlas Iron rose over 5 percent while Fortescue Metals added 2.5 percent.
Kospi up 0.7%
South Korean shares ended at their highest levels in over a week, thanks to a rally amid blue-chip stocks; both Kia Motors and Posco rose over 2 percent each.
Sensex down 0.6%
Indian shares were unable to track Asia-wide gains due to steep losses in the oil and gas sector after the government deferred a decision to hike prices of locally produced gas.