U.S. Earnings Propel Asian Markets

Strong corporate earnings as well as better-than expected housing data out of the U.S. pushed the region's markets higher on Thursday, with Australia's showing its largest percentage increase in six months.

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Asian stocks once again took their cue from the U.S., where it's earnings season. Several major technology companies reported strong profits overnight, with chipmaker Intel at the forefront. The Dow Industrial Average closed 0.8% higher on Wednesday.

The strong performance of U.S. tech companies had a knock-on effect on their peers in Japan, where the Nikkei Average rose 0.8% to 8795.55 on the back of strong gains for electronic-technology companies. Advantest leapt 6.5%, while Dainippon Screen Mfg . gained 6.6%.

There was also strong housing data from the U.S., showing builders started work on more new houses in June than in any month in the past four years—seen as a positive for the world's largest economy, and also Asian markets that depend on it.

U.S. Federal Reserve Chairman Ben Bernanke was in the spotlight again with his second day of testimony to lawmakers on Capitol Hill. He said it's "certainly possible" that the central bank could take new steps to support the economy if the jobs market fails to pick up.

The Australian market was the biggest beneficiary of the U.S. news. The S&P/ASX 200 rose 2%, its biggest one-day increase since Jan. 4, to close at a nine-week high of 4206.7. Resource stocks led the advance, with mining heavyweight BHP Billiton —whose shares finished Wednesday at their lowest point in more than three years—up 3.1%. High-yielding stocks also performed well as investors, seeing bonds offering low returns, turned to companies that offer strong dividends as an alternative: Telecom company Telstra climbed 1.8% and Woolworths was 3.1% higher.

The Australian dollar also got a boost, hitting a record high against the euro and an 11-week high against the U.S. dollar overnight—Mr. Bernanke's comments having taken some shine off the greenback. The Australian currency climbed further Thursday, breaking US$1.04, after reports that the German central bank will start allocating a part of its foreign currency as part of its reserves in the third quarter.

The U.S. dollar fell to a one-month low against the yen, at ¥78.56, after softening 0.3% overnight. The strength of the yen helped cap the gains on the Nikkei, which lagged slightly behind other markets in the region.