Asian shares rose on Thursday, retaining positive momentum as the Federal Reserve reassured markets it would keep its very accommodative stance to support growth, while optimism grew over strong quarterly corporate earnings.
Investor confidence was also boosted by a rally in Apple shares as it reported quarterly profits nearly doubling on the back of soaring iPhone sales in China, lifting tech-heavy Asian markets such as Taiwan and South Korea earlier in the day.
There was scepticism Asian markets would climb as much as their global counterparts did overnight, however, as concerns remain over European banks, with Spain's Santander reporting its first-quarter results later in the session.
European shares were likely to start mixed, with financial spreadbetters predicting that major European markets would open between a 0.1% drop and a 0.1% gain. U.S. stock futures were steady.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.5%.
Hong Kong shares climbed 0.4% on strong quarterly results from China Unicom , the mainland's second-largest mobile phone operator, while Australian stocks added 0.3% as signs the Fed was prepared to offer more stimulus if needed boosted miners and banks.
Japan's Nikkei average underperformed, however, paring all its earlier gains to end flat.
Japanese earnings will likely be patchy, analysts said.
The recovery in equities helped firm Asian credit markets, with the spread on the iTraxx Asia ex-Japan investment-grade index tightening by 2 basis points.
In Japan's credit default swap market, long- and short-term dealers played tug-of-war, with buyers seeking protection recently pushing up spreads on electronic, steel and shipping names on bad fundamentals. But Japan's sovereign CDS tightened.
NEUTRAL BERNANKE
Fed Chairman Ben Bernanke on Wednesday said U.S. monetary policy was "more or less in the right place" even though the central bank would not hesitate to launch another round of bond purchases if the economy were to weaken.
The Fed also adjusted its economic forecasts to acknowledge an improving labour market and slightly higher inflation over the next few years, suggesting it has become somewhat less inclined to take more action to help the economic recovery.
"The totality of all new Fed communications … has reinforced the idea that the policy bias is currently neutral and that the outlook remains highly dependent on incoming data," Societe Generale wrote in a note.
With the Fed's policy decision falling broadly within market expectations, focus turned to the Bank of Japan's policy meeting on Friday, when the Japanese central bank is expected to boost asset purchases to strengthen an already super-easy policy stance in a bid to bring Japan out of deflation.
Fragile global growth kept the outlook mixed for South Korea, which said on Thursday its growth picked up quarter-on-quarter in the January-March period, but year-on-year expansion was the slowest in 2-1/2 years, leaving analysts wondering if the economy has hit a bottom or not.
The International Monetary Fund's stress tests showed most Spanish banks would be able to handle large economic shocks, but Spain's Santander could suffer from provisions against property loans that went sour when Spain's property bubble burst.
