Asian stock markets rose with the Nikkei average rising 0.47 per cent to close at its highest in three months, while South Korea and Singapore markets set records.
Worries about a slump in Chinese shares subsided with the Nikkei adding 83.13 points to 17,958.88 - the highest close since February 27th. The broader TOPIX index also ended at its highest since February 27th, rising 0.69 per cent to 1,767.88.
Earlier in the day, the Nikkei topped 18,000, recovering about 80 per cent of the losses it made during a global stock sell-off in late February. The benchmark is now down 1.9 per cent from this year's high marked just before the sell-off.
Trading firms rose on Morgan Stanley's higher target prices, and retail investors bought steel and other value stocks.
Steel, shipping and trading companies were sought after for their attractive valuations and earnings prospects.
Corporate earnings forecast for the year to March 2008 turned out to be better than expected.
Shanghai shares fell more than 3 percent in late trade, remaining volatile after Wednesday's 6.5 per cent slide triggered by a hike in a share trading tax - the government's latest effort to cool a market that had nearly tripled in value since last May.
South Korea's KOSPI ended 0.9 percent higher after earlier setting a new high, while Australia's S&P/ASX 200 index added 0.3 percent thanks to gains in miners such as BHP Billiton and Hong Kong's Hang Seng Index put on 0.8 percent.
Singapore's Straits Times Index and the Philippine share market both touched new peaks.