Asian markets rallied Friday, boosted by gains in Wall Street and the prospect of new stimulus measures in China and Japan.

An upbeat report from Bank of America, the United States' largest bank, which showed gains in January and February, encouraged investors.

Japan led the increase, soaring more than 5 percent, with Hong Kong's Hang Seng Index close behind it, gaining almost 4 percent.

Terence Khoo is partner at Sofaer Capital in Hong Kong. He manages Asian and emerging markets. He says Asian markets responded to overnight gains in the United States. U.S. Retail sales were better than expected.

"It's starting to show a bit of acceleration. The rate of decline is not getting worse. It's moving a bit," he said.

Khoo says any good news tends to reverse the market. China may do more to stimulate its economy, even as it moves ahead with a $586 billion stimulus package. Japan's government also may take further steps to boost its economy.

Markets were up almost 1 percent in Shanghai, while markets in Australia, Singapore and Taiwan showed gains of 3 percent or more.

Khoo says U.S. stocks rallied for a third day on Thursday, in part because General Electric's bond rating would not be cut as much as had been expected.

Still Khoo says he and other market analysts and investors are not satisfied the global economy has hit bottom yet.

"People have been too hopeful and underestimated the scale of this. We tend to look at very short histories and make conclusions from a relatively short history," he said.

Khoo says investors may have been too bullish in the past. People are more cautious now.