Asian stocks rose on Friday as strong corporate earnings lifted sentiment even as concerns about economic weakness persisted, and investors awaited a policy decision from the Bank of Japan.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.94 percent but remained on track to end the month down 1.4 percent. The Nikkei 225 index in Japan rose 0.51 percent, while the S&P/ASX 200 index in Australia rose 0.33 percent.
U.S. stocks closed sharply higher on Thursday, boosted by positive results from bellwether technology firms, including Meta Platforms Inc, Microsoft Corp, and Alphabet Inc.
China's stock market fell, while Hong Kong's Hang Seng index rose 0.5%. Geopolitical tensions, as well as concerns about the global economy's outlook, have dampened investor sentiment in recent weeks.
Data released overnight showed that the United States' economy slowed more than expected in the first quarter, despite higher-than-expected price growth.
According to Taylor Nugent, an economist at National Australia Bank, the data showed "an unhappy combination" of slower-than-expected growth and higher-than-expected price increases in the first quarter.
The core PCE data, one of the Federal Reserve's inflation measures, piqued market interest, according to Nugent. The core PCE price index increased by 4.9 percent after increasing by 4.4 percent in the previous quarter.
Data also showed that initial claims for unemployment benefits fell, indicating that the labour market remains tight, which is a major driver of inflation.
"Stubborn inflation data gives the Fed little leeway to take notice of nascent slowing in activity and the labour market if it continues to develop," Nugent said.
According to the CME FedWatch tool, markets are pricing in an 85 percent chance of the Fed raising interest rates by 25 basis points at its meeting next week. Traders expect the hike to be the last in the Federal Reserve of the United States' fastest monetary policy tightening cycle since the 1980s.
However, investors' attention will be focused on Japan's new central bank governor, Kazuo Ueda, at his first policy meeting on Friday.
The central bank is widely expected to maintain its short-term interest rate target of -0.1% and a pledge to keep the 10-year bond yield around zero at the meeting Ueda chairs just three weeks into his term.
Investors have reduced their bets on a policy shift, creating a window of calm that, ironically, allows governor Ueda to move quickly.
According to the Nikkei, the BOJ will discuss on Friday conducting a comprehensive examination of its previous monetary easing steps and revising its guidance on the future policy path.
Core consumer prices in Japan's capital, Tokyo, rose 3.5% year on year in April, according to government data released on Friday.
"While no policy change is expected, the focus will be on the outlook/guidance and any potential review of the central bank's longer-term performance and monetary policy settings," said Anderson Alves, market analyst at ActivTrades.
The 10-year Treasury note yield fell 0.8 basis points to 3.520 percent after posting their biggest intraday gain since March on Thursday as investors weighed the looming debt ceiling showdown in Washington.
In Asian hours, the 30-year Treasury bond yield was 3.754 percent.
The currency market was relatively calm ahead of policy decisions. The dollar index rose 0.02 percent against six rival currencies, while the euro rose 0.03 percent to $1.103.
The Japanese yen dropped 0.3% to 133.99 per dollar. The pound was last trading at $1.2495, up 0.6% on the day.
US crude was down 0.01 percent to $74.75 per barrel, while Brent was down 0.18 percent to $78.23.
Spot gold fell 0.1% to $1,985.39 per ounce. Gold futures in the United States fell 0.15 percent to $1,986.90 per ounce.