Hong Kong stocks continued their surge on Friday, rallying for a third straight session as mainland investors flooded into the market, while Tokyo dipped after breaching the 20,000 point mark for the first time in 15 years.
Regional markets were mostly higher after a positive lead from Wall Street, while better-than-forecast Chinese inflation figures also provided strong support.
Tokyo's Nikkei dipped 0.15 percent after earlier breaking 20,000 -- a level not seen since April 2000. The index finished 30.09 points down at 19,907.63
Hong Kong, which climbed more than six percent over the previous two days, climbed 0.50 percent in late trade. Shanghai, which has almost doubled over the past year on hopes for fresh stimulus, rallied 1.94 percent, or 76.78 points, to end at 4,034.31.
Sydney added 0.61 percent, or 36.18 points, to 5,968.37 and Seoul surged 1.40 percent, or 28.89 points, to 2,087.76.
Hong Kong's Hang Seng Index has rocketed since reopening Wednesday after the long holiday weekend, with traders in the mainland making the most of a link-up between the index and Shanghai's exchange.
Turnover hit record highs on each of the past two days as investors north of the border sought out relatively cheap stocks after a surge in Shanghai that has been fuelled by hopes for stimulus to the world's number two economy.
While the stock connect programme was initially met with little interest, mainland authorities' decision last month to expand the number of fund-management firms allowed to buy in Hong Kong has seen activity surge.
But analysts have warned of a snap-back.
"This phenomenon of a large amount of money pushing into a space in the market in such a short period of time is exaggerating moves," Tim Schroeders, a portfolio manager at Pengana Capital in Melbourne, told Bloomberg News.
"It looks highly speculative and prone to a correction at some stage. There seems to be a lot of speculation fuelling fund flows in terms of policy stimulus from China which may or may not happen."
- China inflation -
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The surge in demand for Hong Kong stocks also pushed the city's dollar up against the greenback, testing its 32-year peg and forcing the de facto central bank to intervene and sell the local currency.
In China the National Bureau of Statistics said inflation came in at 1.4 percent in March, the same as February and better than the 1.3 percent forecast in a Bloomberg survey.
The figures will be welcomed after January's five-year low as authorities struggle to kick-start economic growth and fend off a painful spiral of deflation.
On Wall Street the three main indexes ended higher after the Labor Department said the number of first-time unemployment claims filed in the past four weeks fell to a nearly 15-year low.
The Dow rose 0.31 percent, the S&P 500 gained 0.45 percent and the Nasdaq advanced 0.48 percent.
In currency exchange the dollar was at 120.60 yen against 120.59 yen in New York and well up from 120.28 yen in Tokyo earlier Thursday as the US data revived talk of a summer interest rate hike by the Federal Reserve.
The euro bought $1.0620 and 128.06 yen on Friday against $1.0659 and 128.55 yen in US trade
US benchmark West Texas Intermediate for delivery in May was up five cents at $50.84 in volatile morning trade and Brent crude for May rose 23 cents to $56.80.
Gold fetched $1,194.64 against $1,199.20 late Thursday.
In other markets:
-- Taipei rose 0.52 percent, or 49.66 points, to 9,617.70.
Taiwan Semiconductor Manufacturing Co. rose 2.8 percent to Tw$147.0 while smartphone maker HTC fell 1.11 percent to Tw$133.5.
-- Wellington was flat, nudging up 0.19 points to 5,847.35.
Fletcher Building was up 0.12 percent at NZ$8.25 with Contact Energy down 0.17 percent at NZ$5.94
