Hong Kong's Hang Seng index leapt 9.0 per cent, Singapore's Straits Times index surged 9.3 per cent, the Jakarta Composite shot up 10.7 per cent, the Bangkok broad-based index zoomed 8.1 per cent and the Manila index jumped 7.0 per cent.

Tokyo's Nikkei gained 2.2 per cent, Sydney's All-Ordinaries rose 2.1 per cent, Seoul's KSE index ended 1.4 per cent higher and Kuala Lumpur's KLSE composite moved up 0.8 per cent.

A firm yen and stable regional currencies underpinned the strong gains amid hopes of a more benign interest-rate environment in the crisis-stricken region where a credit crunch has slowly begun to ease.

Asianofficials welcomed the US Federal Reserve's decision which came as a surprise because it was announced outside of its regularly scheduled policy meetings.

"We welcome the move if this brings positive results to the US and global economies," Japanese prime minister Keizo Obuchi told reporters in Tokyo.In Hong Kong, share prices soared to a five-month high on Friday on expectations of a local interest rate cut after the United States cut rates, dealers said.

Hong Kong banks followed the US lead shortly after the market closed, offering a quarter of a point cut in the deposit rate in a prelude to prime rate cuts by the territory's banks.

"There is a general relief all over Asia over the US interest rate cut," said Howard Gorges, vice-President of South China Brokerage.

"The US move has led to general expectations that local banks will follow suit as the Hong Kong dollar is quite stable now."

The key Hang Seng index gained 806.59 points to close at 9,777.01, breaching the 9,670.45-point level it touchedon May 21, Tokyo: Tokyo stocks closed 2.2 per cent higher, buoyed by gains on Wall Street following the Fed's decision to cut interest rates, brokers said. The Nikkei-225 index rose 285.17 points to close at 13,280.54. The Topix index of all issues in the first section on the Tokyo Stock Exchange rose 26.57 points at 1,006.68.

Trading was moderate, with an estimated 470 million shares changing hands, compared with 409 million shares the previous day.

"Tokyo stocks were lifted by gains on Wall Street yesterday, encouraged by the Fed's move to ease its monetary policy," said a broker from Nomura Securities Co Ltd. "The Fed's decision would certainly help the US economy, and shares of major Japanese companies such as Toyota and Sony who need the American market, went up," the broker said.

On Thursday, the Dow Jones Industrial Average shot up 330.58 points, or 4.1 per cent to 8,299.36 - the third largest point increase recorded by the index after the surprise decision by the Fed to cut short-term interestrates. Singapore: Singapore stocks shot up 9.3 per cent as a US interest rate cut lifted hopes of a further rate reduction at home to help induce economic recovery and return of foreign funds to the bourse.

The benchmark Straits Times index closed at a five-month high, up 94.85 points to 1,119.60 but off its intra-day high of 1,131.95 while the broader All-Singapore index rose 23.37 points to 328.69.

Speculation was rife of another round of Singapore interest rate cuts as early as next week, with three-month interbank rates having fallen to 3.375 per cent, the lowest in 18 months.

"The market is buoyant, in tandem with the region," a dealer with a local stock brokerage said. "Rate cuts in Singapore are on the horizon despite the cuts that we have seen in recent days," he said.

"There could also be more US funds returning to the region and Singapore, being some sort of a safe haven in the region, can hope to reap the bulk of the inflow," the dealer said. Kuala Lumpur: Malaysian share prices closed 0.8per cent higher but ended off their highs as early buying by local funds ahead of the national budget announcement lost momentum.

"Buying was all local to start with. This is obviously the problem with an insulated market. There is not enough money to go around. We can't seem to keep up momentum even to rise 10 points," an institutional sales manager with a local brokerage said.

"Buying is flagging and I am told there is some selling from foreigners who have until now held on, not because they wanted to but because of the circumstances - the (capital) controls."

The Kuala Lumpur Stock Exchange composite index rose 3.01 points to end at 396.26 off a high of 404.22. The lesser second board index gained 1.25 points, or 1.3 per cent at 100.68.