They said investors appear increasingly certain that the US economy remains on course, so underpinning demand for the region's exports, and meaning it was unlikely there would be any unpleasant surprises from the US Federal Reserve later in the day on interest rates.

At the same time, the prospect of tighter monetary policy in the European Union and Britain does not inspire too much concern given that interest rates remain modest on a historical basis and show minimum volatility, a key factor.

Gains were driven by continued frenzy over merger and acquisitions, with speculation of a potentially massive deal involving two of the world's biggest miners, BHP Billiton and Rio Tinto, pushing Sydney up 0.58 percent to a record close.

With liqudity abundant and the Australian mining sector one of the strongest performers over the past several years, investment houses seem ready to have a close look at what may be on offer there, with size no object.

The Chinese markets put in an unprecedented performance as the Shanghai Composite Index rose 1.6 percent to close above 4,000 points for the first time.

Equally impressive, turnover on the mainland topped 48 billion dollars, dwarfing Tokyo, the world's second biggest bourse, and putting it likely second only to Wall Street in terms of turnover on the day.

Dealers mostly believe further Chinese gains are to come given the flood of money but some are cautious amid concerns over high prices.

Warnings from Chinese officials at the dangers of a bubble and a series of measures to tighten up on liquidity all seem to have had little or no effect.