U.S. bank Wells Fargo forecast a record profit, South Korea steered clear of recession, and Chinese export data beat expectations, all offering hope that the worst of the financial crisis had passed.

Encouraging data on U.S. trade and jobless claims helped Wall Street stocks end up for a fifth week on Thursday, while White House economic adviser Lawrence Summers predicted the economy would emerge from a sense of freefall in months as stimulus and rescue efforts took effect.

Asian stocks were also higher on Friday, with Japan's Nikkei average <.N225> ending up 0.5 percent, having reached a three-month high above 9,000 points during the session. <.T>

The Nikkei is likely to test this year's peak of around 9,300 in the near term, supported by growing optimism toward the U.S. economy, said Takahiko Murai, general manager of equities at Nozomi Securities.

But further gains in Tokyo stocks might be limited as executives at major firms here still hold pessimistic views on the Japanese economy.

Japan's Prime Minister Taro Aso formally announced a $154 billion spending plan to lift the country out of its deepest depression since World War Two.

China's stocks soared to a seven-month closing high after the official Xinhua news agency said exports had fallen 17.1 percent in March, much slower than February's 25.7 percent tumble, and beating economists' forecast of a 21.5 percent drop.


Banks remained in focus. Sumitomo Mitsui Financial Group <8316.T>, Japan's third largest, was flooded with sell orders after it said it faced a net loss of $3.9 billion for the financial year just ended and would raise as much as $8 billion through the sale of shares.

Chinese lender Shanghai Pudong Development Bank <600000.SS> said it planned to raise as much as $4.4 billion via a sale of shares and bonds to bolster capital as its annual profit more than doubled on rapid loan expansion.

Profits were also improving for Wells Fargo, which said it expected to report net income of about $3 billion for the first quarter, more than double what analysts on average expected. Wells Fargo shares soared more than 30 percent on the New York Stock Exchange on Thursday.

We're in a market that is hungry for what I call rays of sunshine or glimmers of hopes on company fundamentals and economics, said Fred Dickson, market strategist and director of retail research at D.A. Davidson & Co in Lake Oswego, Oregon.


Markets in parts of Asia including Australia, Singapore and Hong Kong were closed for the Good Friday holiday, as were European and U.S. markets.

Stocks in Seoul jumped almost 2 percent and the won also firmed after the South Korean central bank estimated Asia's fourth-largest economy grew a seasonally adjusted 0.2 percent in the first quarter, helped by interest rate cuts and a fiscal stimulus.

Korea on Thursday left interest rates unchanged, saying it saw signs the sharp deterioration in the economy was abating.

But in a sharp downgrade of its previous forecasts, the Bank of Korea said the export-dependent economy would contract by 2.4 percent in all of 2009, which would mark the first annual decline in more than a decade.

And the market in Seoul closed before POSCO <005490.KS>, the world's fourth-largest steelmaker, revealed it missed forecasts for first-quarter profit, which slumped to a seven-year low. It didn't hold out much hope of improvement for the second quarter.

Other measures of the health of the global economy were also mixed.

The U.S. trade deficit shrank 28.3 percent in February to its smallest since November 1999 as imports tumbled and exports managed to grow slightly, while new claims for U.S. jobless aid eased.

But German industrial production dropped by almost a quarter year-on-year in February, recording its biggest annual fall since reunification in 1990, while Italy, Sweden and Finland also posted weak data.

(Writing by Lincoln Feast; editing by Will Waterman)