Asian shares leapt on Wednesday after a jump on Wall Street, with financial and resource stocks leading and shares in Hong Kong shrugging off China's latest move to temper robust lending.
The Hang Seng rose 1.7 percent after a long Lunar New Year holiday break, with Chinese banking stocks like Bank of China gaining over 2 percent despite Friday's surprise hike in bank reserve requirements by Beijing as it tries to moderate credit growth and inflationary pressures.
Shanghai markets remain shut for the entire week.
Shares in Tokyo climbed 2.1 percent, buoyed by resource stocks such as Mitsubishi Corp, while the MSCI index of Asian shares outside Japan rose 1.5 percent, touching its highest level in three weeks.
Resource shares gained after copper led a rally across the broader base metals complex on Tuesday as the dollar stumbled and as equities markets recovered from a sell-off in recent weeks that was triggered by growing debt problems in Greece and fears that the global economic recovery was losing momentum.
U.S. stocks posted gains of as much as 1.8 percent overnight as traders returned from a three-day break, helped by strong New York State factory data and gains in European equities, which were buoyed by upbeat results from UK bank Barclays
"There's a bit more of a shift to riskier assets, especially those linked to commodities, and this may continue for a day or two," said Tomomi Yamashita, a fund manager at Shinkin Asset Management in Tokyo.
"There's no question that the U.S. economy is improving, especially if you look at indicators, although this does raise the question of when we could expect an interest rate hike."
Japan's benchmark Nikkei touched its highest level since early February and the broader Topix rose 1.8 percent.
But Toyota Motor Corp fell 0.2 percent after U.S. regulators opened an investigation into whether it had acted in a timely way to recall cars for acceleration problems. The automaker also moved to slow its U.S. production.
Toyota shares have lost about a fifth of their value since it announced more massive recalls in late January for safety issues.
In Seoul, shares rose 1.4 percent as the U.S. data fuelled foreign buying into financial and technology stocks, but a fall in the dollar and strengthening in the won limited gains in Hyundai Motor and other exporters.
Australian stocks rallied 1.9 percent, the biggest one-day gain in two-and-a-half months, with banks benefiting from strong trading updates and miners drawing strength from the jump in commodity prices.
Top miners BHP Billiton and Rio Tinto climbed nearly 2 and 3 percent respectively as metal prices rose after the dollar sank against the euro, and as investors eyeing strong growth in Asia piled into industrial metals.
The dollar index, a gauge of its strength against six other major currencies, was unchanged from late U.S. levels after shedding 0.8 percent the previous session and hitting its lowest level in a week. It was the biggest one-day fall since November.
The euro held steady after surging 1.3 percent against the dollar on Tuesday. Investors were still cautious, however, wary that Greece's debt problems have yet to be solved, and the euro remains highly sensitive to more negative fiscal news.
It was trading at $1.3760 down 0.1 percent on the day but well above last week's nine-month low of $1.3532.
Gold prices steadied near two-week highs, with spot gold at $1,116 an ounce.
U.S. crude futures edged higher above $77 a barrel but trading volumes were light as market players awaited a slew of statistics due later in the day for further price direction.
