Asian shares pushed higher on Friday after US President Joe Biden signed a $1.9 trillion stimulus bill into law, and as a retreat in bond yields overnight eased global concerns about rising inflation.
Mr Biden signed the legislation ahead of a televised address in which he pledged aggressive action to speed vaccinations and move the country closer to normality by July 4.
MSCI's broadest gauge index of Asia-Pacific shares outside Japan soared 0.5 per cent on Friday morning, supported by tech gains.
Seoul's Kospi added 1.1 per cent, Taiwan shares were up 0.2 per cent and Australia's ASX 200 gained 0.9 per cent.
Japan's Nikkei rose almost 1 per cent, but China's blue-chip CSI300 index lost 0.4 per cent as that country's high-valuation tech and consumer firms dragged.
The signing of the American Rescue Plan provided a further boost to market sentiment after the European Central Bank said it was ready to accelerate money-printing to keep a lid on borrowing costs, using its $2.2tn Pandemic Emergency Purchase Program (PEPP) more generously over the coming months to stop any unwarranted rise in debt financing costs.
"It's looking like we'll see a positive open across Asia-Pacific markets," said Michael McCarthy, chief markets strategist at CMC Markets.
"The big news overnight was the decision from the ECB. There might be some disappointment they didn't expand their bond purchase programme but that's largely offset by undertakings to accelerate the purchases."
The US technology stocks pushed the broader market solidly higher on Thursday, as investors welcomed another reprieve from the volatility in the bond market that has dominated the conversation on Wall Street for the last several weeks.
Big Tech stocks, which have been hurt this year by rising bond yields, were among the biggest gainers. Apple was up 1.5 per cent, Microsoft rose 2.4 per cent and Google's parent company, Alphabet, was up 3.4 per cent.
“We are entering this environment where growth is going to be higher than expected," said Charlie Ripley, senior investment strategist for Allianz Investment Management. “With higher growth you get higher interest rates.”
Much of the uncertainty facing the market at the beginning of the year has faded, he said, as vaccine distribution ramped up and businesses reopened. The latest round of stimulus from Washington is also helping to lift uncertainty about the recovery.
A better-than-expected US government bond auction could support a rally in tech stocks and a rotation between growth and value stocks in the next few weeks, said Cliff Zhao, chief strategist at China Construction Bank International in Hong Kong.
* With inputs from Associated Press
