The European Central Bank's hint at fresh stimulus measures for the stuttering eurozone economy sent Asia stock markets and emerging currencies surging Friday, while the euro held on to losses.
Regional investors were set to end another week on a positive note, extending an October rally that has been fuelled by hopes for more monetary easing from key central banks, including in the United States, China and Japan.
The gains come after global markets suffered their worst quarter in four years during July-September, owing to worries about the Chinese economy.
After its latest policy meeting on Thursday, the ECB unveiled no new measures, but its head Mario Draghi said: "The degree of monetary policy accommodation will need to be re-examined at our December meeting."
The comment inflamed talk the bank will ramp up its already vast bond-buying scheme -- essentially printing more cash -- in a bid to fan chronically weak inflation and kick-start torpid growth.
With the prospect of more euros flooding the market, the single currency plunged Thursday to $1.1111 and 134.10 yen in New York, well down from $1.1339 and 135.65 yen in Asia earlier in the day.
And on Friday in Tokyo the unit bought $1.1115 and 134.15 yen.
It also fuelled a rally in equities, with Frankfurt and Paris surging more than two percent while all three main indexes on Wall Street also enjoyed healthy gains.
The upbeat mood filtered through to Asia as Tokyo ended 2.11 percent higher, Sydney gained 1.67 percent and Seoul tacked on 0.86 percent. Hong Kong added 1.30 percent in the afternoon. Shanghai closed 1.30 percent higher.
- 'Early Christmas present' -
"Mario Draghi and his elves at the ECB practically confirmed there will be an early Christmas present in order for the European economy on 3 December," Evan Lucas, a market strategist at IG, said in an email to clients.
"In short, all options are on the table for the ECB, also meaning the Bank of Japan and the Fed are now live events as well."
Speculation the Federal Reserve will put off an expected interest rate hike until next year has gained traction over the past month as bank policymakers fret over the weak global economic outlook.
A growth slowdown in China and ongoing troubles in Japan's economy have also exacerbated talk that those countries will soon announce more measures, feeding a rally in financial markets.
Traders are keeping an eye on China, where the country's leaders are preparing for a top-level policy meeting -- or plenum -- next week, with talk of measures to reform the sprawling state-owned sector to try to improve efficiency.
Gerry Alfonso, a sales trader at Shenwan Hongyuan Group in Shanghai, said: "The market expectation is that the plenum will continue with its policies to support the economy, particularly in strategically important sectors.
"The authorities seem determined to support the economy and that's clearly giving confidence to investors."
The likelihood that monetary policy will remain more accommodative for borrowers supported high-yielding, riskier, assets, such as emerging market currencies.
In morning trade, the Malaysian ringgit soared 1.31 percent and Indonesia's rupiah gained 0.90 percent. The Australian dollar and Thai baht each put on 0.4 percent while the Taiwan dollar was up 0.33 percent.
South Korea's won surged 1.15 percent, with news that the country's economy grew more than expected in July-September also providing strong support.