Asian stocks extended their rally on Thursday, driven by sustained optimism over China's aggressive stimulus measures, even as Wall Street closed lower overnight.
MSCI's broadest index of Asia-Pacific shares outside Japan surged more than 1%, hitting its highest level in over two years.
By 1:45 pm AEST (3:45 am GMT) Japan's Nikkei 225 led the gains, rising 2.5%, while Hong Kong's Hang Seng Index advanced 0.7%. Mainland China's CSI300 added 0.6%.
Investor sentiment received a further boost following a Bloomberg report that China is considering injecting up to 1 trillion yuan ($142.39 billion) into its largest state banks to enhance their ability to support the struggling economy.
Despite the upbeat mood in Asia, investors globally remained cautious ahead of a series of speeches from U.S. Federal Reserve policymakers, including Chair Jerome Powell, which could offer new insights into the U.S. interest rate outlook.
Additionally, the release of the core personal consumption expenditures (PCE) price index, the Fed's preferred inflation gauge, is expected on Friday.
The dollar strengthened on Thursday, having dipped earlier in the week as China's stimulus measures lifted risk appetite. This led to a surge in demand for China-linked currencies, including the Australian and New Zealand dollars.
The Aussie rose 0.3% to $0.684, while the New Zealand dollar was flat at $0.6263.
The euro and British pound both retreated from recent highs, trading at $1.11385 and $1.3336, respectively. The offshore yuan gained 0.2% to 7.0712 per dollar.
In commodities, oil prices were flat, with Brent crude futures at $73.48 per barrel and WTI crude at $69.69 per barrel. Spot gold ticked 0.1% to $2,660.75 per ounce after hitting a record high on Wednesday.