Boosting confidence on Friday were comments from China's premier that Beijing was ready if needed to add more "ammunition" to an already-announced $586bn stimulus aimed at propping up the world's number three economy.
European shares were also strong during afternoon trading on Friday, led by London's FTSE-100 which was up 1.63 per cent.
In Paris, the Cac 40 gained 1.37 per cent while in Frankfurt the Dax rose 0.84 per cent.
On Wall Street, the Dow Jones indistrial average opened 0.22 per cent up at 7167.35.
Investors in Japan were also lifted by speculation that the Japanese government may add more stimulus cash to support its own economy.
Taro Aso, the prime minister, ordered an additional economic stimulus to battle the country's worst recession in decades, warning that it would be "too late to act" after the full extent of the slump becomes clear.
Local reports put the size of the package at $200bn.
Meanwhile, Japan's finance minister, in a statement reflecting growing discord over how to tackle the financial crisis, said that reviving the world economy should be the top priority for next month's G20 summit, while stricter regulations can wait.
"We all agree [on the need for better financial regulation], but I personally feel: are these actions necessary at a time of crisis? What we ask at this moment is to save the life of the world economy - not to comment about its beard," Kaoru Yosano told the Financial Times.
Plummeting overseas demand for exports has battered the economies of Japan and China and been deeply unsettling for investors.
On Thursday, news that Bank of America, the largest bank in the US, was profitable in January and February helped lift sentiment on Wall Street.
Rising retail sales
The release of better-than-expected US retail figures also helped fuel a rally in US stocks, with data released by the government showing retail sales, excluding on automobiles, rose in the first two months of the year.
The figures suggest that US consumer spending – a key driver for both the US economy as well as several others, particularly major exporters in Asia – may be beginning to stabilise.
Amid the talk of a market recovery, a group of Hong Kong investors have sued Lehman Brothers and HSBC in the US in their fight to recoup more than $1.5bn after the Wall Street's firm collapse left their bond holdings possibly worthless.
The class-action lawsuit filed in New York on Thursday night marked a new, more contentious phase in Hong Kong's dispute over products tied to Lehman Brothers Holdings Inc, a US investment bank that filed for bankruptcy protection in September.
Thousands of local investors - among them retirees and pensioners who sunk their life savings in the products - have faced massive losses, provoking widespread anger, street protests, government probes and a push for tougher regulations.