Asian stocks rallied on Friday after China's central bank chief said Beijing still has enough monetary firepower to keep the world's second-largest economy on track, as G20 ministers gathered in Shanghai.
Global equities looked set for their second straight week of gains, with major bourses across Asia and Europe pushing higher after Wall Street advanced overnight.
The rally came as officials from the Group of 20 industrialised nations gathered for a two-day meeting in Shanghai, with China's sagging growth expected to loom over the discussions.
Shanghai rose almost one percent after the head of the People's Bank of China said the economy was strong and signalled authorities could do more to help stimulate growth.
Battered industrial metals prices rebounded, while high yielding currencies including the New Zealand dollar jumped as sentiment improved.
Oil also rose, with the US benchmark trading up five cents at $33.13 and Brent crude adding 53 cents to $35.24, driving energy companies higher.
Tokyo added 0.30 percent after data showing inflation fell to zero in January spurred expectations the central bank could ramp up its massive bond buying programme.
"Markets are rallying ahead of the G20 meeting, boosting risk assets," Wei Wei, an analyst at Huaxi Securities in Shanghai, told Bloomberg News.
"The risk is that investor sentiment is disappointed by the meeting's outcome."
Shanghai plunged more than six percent on Thursday, hit by tightening liquidity and concerns a rally that has added 10 percent since mid-January was overdone.
Chinese shares have been on a rollercoaster ride since a debt-fuelled bubble burst last year, while cooling growth in the key importer of raw materials has sent commodity and energy prices spinning.
- G20 in focus –
Pressure has been mounting for central banks to let loose their monetary firepower to stimulate growth and reassure investors, after financial markets posted one of the worst starts to the year in living memory.
Japan has already adopted negative interest rates, the European Central Bank has embarked on a huge quantitative easing programme, and the US Federal Reserve has signalled possible delays to interest rate rises.
But German Finance Minister Wolfgang Schaeuble set the stage for disputes at the Shanghai meeting when he said Europe's largest economy opposes any G20 fiscal stimulus package.
"Monetary policy is extremely accommodating to the point that it may even be counterproductive in terms of negative side effects," he said.
Speaking at the same conference, Bank of England governor Mark Carney retorted: "Several commentators are peddling the myth that monetary policy is out of ammunition."
In Japan, news that inflation fell to zero in January also raised expectations the Bank of Japan could ramp up its massive central bank bond-buying programme.
The news is a fresh blow for Prime Minister Shinzo Abe after three years of trying to kick-start growth with a raft of policies that includes government spending and a massive central bank bond-buying programme.
Also in Tokyo, shares in Sharp plunged 11 percent after the parent company of Taiwan's Foxconn delayed signing a definitive agreement to take control of the Japanese electronics maker.
Foxconn said the decision to delay was because of "new material information," which Bloomberg News reported could include more than 300 billion yen of liabilities.
- Key figures around 0900 GMT –
Tokyo - Nikkei 225: UP 0.30 percent at 16,188.41 points (close)
Shanghai - composite: UP 0.95 percent at 2,767.21 points (close)
Hong Kong - Hang Seng: UP 2.52 percent at 19,364.15 points (close)
Euro/dollar: DOWN at $1.1015 from $1.1023 on Thursday
Dollar/yen: UP at 112.87 yen from 112.15 yen on Thursday
New York - Dow: UP 1.3 percent at 16,697.29 points (close)
London - FTSE 100: UP 0.85 percent at 6,064.32 points
-- Bloomberg News contributed to this report --
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