HONG KONG (MarketWatch) -- Japanese stocks jumped in early trading Friday to recover some of the steep losses suffered in the previous session, with exporters aided as the U.S. dollar climbed above Yen101 after a slew of monthly economic data.
The Nikkei Stock Average gained 1.9% to 13,847.64 a day after it plunged by 5.2%, while the broader Topix rose 1%.
The gains were steady after the sharp volatility seen recently amid concerns over an increase in Japanese government bond yields and a firmer yen.
"We think the recent plunge in [the] Nikkei is the result of the sharp appreciation in the yen and expect it to reverse," said ING Financial Markets Research economist Sakpal Prakash.
He said the Bank of Japan 's accommodative policies are expected to lift the dollar to Yen110 by the end of the year, and to Yen115 by the end of 2014.
At its current level, the Nikkei Average is off 0.2% so far in May after rising for nine straight months.
Elsewhere in Asia, South Korea's Kospi rose 0.5% and Australia's S&P/ASX 200 gained 0.1%.
Taiwan's Taiex advanced 0.7%, and the Shanghai Composite Index inched up 0.1%, but Hong Kong's Hang Seng Index dropped 0.2%, swinging off modest initial gains.
The broad advances came as stocks on Wall Street rose overnight on signs of further improvement in the U.S. housing market, while weaker-than-expected data on first-quarter economic growth and jobless claims raised hopes the Federal Reserve may keep its current level of bond purchases.
"Every U.S. data point about the pace of economic growth is being closely examined by market followers after Federal Reserve Chairman Ben Bernanke indicated that the central bank could pare back its stimulus efforts should the U.S. economy continue to improve," said Perpetual head of investment-market research Matthew Sherwood.
"The Fed needs to improve its communication with the market about what its intentions truly are, but the stimulus is only likely to be reduced, not reversed," he said.
In Japan, the rebound followed data showing April core consumer prices rose 0.3% from March, although they were 0.4% lower from the year-ago month.
Japanese industrial production during the same month rose 1.7% from a year earlier, but a survey indicated lingering pessimism, with manufacturers tipping flat output for May and a 1.4% drop in June.
Among the notable gainers in Tokyo, Sony Corp. (SNE) jumped 4% after several reports said the company has tapped Morgan Stanley and Citigroup to help sound out options for its entertainment business. The reports came after billionaire hedge-fund manager Daniel Loeb called on the electronics major to spin off its entertainment business.
Several other exporters also advanced even as the U.S. dollar (USDJPY) straddled the Yen101 level.
Shares of Fanuc Corp. (FANUY) rallied 4.4%, and Kyocera Corp. (KYO) added 2.5%.
Fast Retailing Co. (FRCOY) gained 2.4% after plunging 11% in the previous session.
Financial stocks also rebounded after recent losses, with Sumitomo Mitsui Financial Group Inc. (SMFJY) rising 1.6%, and Mitsubishi UFJ Financial Group Inc. (MTU) adding 0.8%.
In Sydney trade, a retreat in some banks countered gains in mining stocks. Shares of Evolution Mining Ltd. (CAHPF) leaped 5.1% and Newcrest Mining Ltd. (NCMGY) was ahead by 1.1% after an overnight improvement in gold prices.
In the broader mining space, BHP Billiton Ltd. (BHP) rose 1.5%, and Rio Tinto Ltd. (RIO) advanced 2.4%.
But heavyweight Commonwealth Bank of Australia (CBAUY) and National Australia Bank Ltd. (NABZY) gave up early gains amid further selling pressure on high dividend-paying stocks ahead of the weekend. The stocks fell 0.5% and 1%, respectively.
Hong Kong stocks fluctuated between gains and losses in choppy early trading, with heavyweight HSBC Holdings PLC (HBC) and some property developers climbing on positive cues from the U.S.
But mainland Chinese banks and insurance companies fell on caution ahead of the release of the monthly Purchasing Managers' Index data. An official PMI gauge for May was due out Saturday, while a final reading of a separately compiled PMI from HSBC and Markit was scheduled for Monday.
HSBC rose 1.1%, China Resources Land Ltd. (CRBJF) gained 0.6%, and casino operator Sands China Ltd. (SCHYY) advanced 2.2%.
But shares of China Construction Bank Corp. (CICHY) lost 1.1%, and China Life Insurance Co. (LFC) declined 1%,weighing the broader market.