HONG KONG: Asian markets rebounded on Friday after the previous day's huge sell-off, with dealers picking up bargains in Tokyo, helped by a Wall Street rally and upbeat US data.

The dollar slipped after enjoying a bright start, however, which in turn pared early gains for Japan's Nikkei index, with fears over a possible end to central bank monetary easing continuing to drag on sentiment.

Tokyo climbed 1.94 percent, or 241.14 points, to 12,686.52 after slumping 6.35 percent on Thursday. However, it was well down from the 3.57 percent surge early in the morning.

Sydney jumped 2.05 percent, or 96.0 points, to close at 4,791.8, Seoul put on 0.35 percent, or 6.51 points, to 1,889.24. Hong Kong rose 0.39 percent, or 82.10 to 20,969.14.

Chinese stocks closed up 0.64 percent, or 13.68 points, at 2,162.04. The index fell nearly three percent on Thursday as dealers returned from a three-day holiday to another batch of weak domestic economic data.

Markets were sent tumbling on Thursday as investors fret about the end of the huge bond-buying put in place by the US Federal Reserve in September and which in turn fuelled a surge in global stock markets.

That has raised concerns about Japan's own massive stimulus unveiled in April as part of a spending splurge by Prime Minister Shinzo Abe -- dubbed "Abenomics" -- aimed at boosting the economy.

But David Herro, CIO of international equities at Harris Associates, told Dow Jones Newswires: "Through all of the recent market volatility, the fundamentals of Abenomics remain in place, and just need time to play out."

Bargain hunting was supported Friday by figures showing US claims for unemployment insurance benefits fell in the first week of June, pointing to a continued but slow recovery in the jobs market.

The government also said retail sales rose 0.6 percent in May from April, beating expectations and driven by a surge in autos.

"Car sales and retail sales in general are decent, suggesting consumers are recovering from the pain of higher taxes," said Chris Low of FTN Financial.

On Wall Street the Dow climbed 1.21 percent, the S&P 500 was up 1.48 percent and the Nasdaq added 1.32 percent.

The dollar benefited from the news and rose in New York Thursday to 95.31 yen, from 94.64 earlier in the day in Tokyo.

However, there remain questions over whether the upbeat US results can be sustained and what it means for the Fed stimulus programme, with upbeat data suggesting the economy can grow without the support.

And on Friday afternoon the greenback stood at 94.98 yen.

In other forex trade the euro bought $1.3337 compared with $1.3372 in New York while it was also at 126.64 yen from 127.48 yen.

Oil prices were mixed, with New York's main contract, light sweet crude for delivery in July, rising five cents to $96.74 a barrel and Brent North Sea crude for August delivery shedding three cents to $104.92.

Gold was at $1,385.46 at 0640 GMT from $1,385.70 late Thursday.

In other markets:

Manila closed 2.10 percent, or 128.18 points, higher at 6,242.26.

Philippine Long Distance Telephone added 2.23 percent to 2,842 pesos. SM Investments rose 4.26 percent to 991 pesos and Metropolitan Bank gained 1.15 percent to 114.60 pesos.

Taipei fell 0.18 percent, 13.92 points, to 7,937.74.

Taiwan Semiconductor Manufacturing Company rose 1.44 percent to Tw$106.0 while smartphone maker HTC fell 1.7 percent to Tw$260.5.

Wellington rose 0.43 percent, or 19.08 points, to 4,420.98. (AFP)