SYDNEY, NSW, Australia - A reduction of the official lending criteria in China has boosted stocks on the mainland, and in Hong Kong, with the buying sentiment spreading across Asia.

China reduced its 5-year loan prime rate (LPR) by 15 basis points Friday, more than expected.

"While it certainly will not suffice to reverse growth headwinds in Q2, the cut constitutes a move in the right direction so markets might be reacting to expectations of stronger easing going forward," Carlos Casanova, senior Asia economist at Union Bancaire Privee in Hong Kong told Reuters news agency Friday.

China's Shanghai Composite accelerated 49.60 points or 1.60 percent to close Friday at 3,146.57.

In Hong Kong, the Hang Seng advanced 614.32 points or 3.05 percent to 20,735.00.

The Nikkei 225 in Tokyo surged 336.19 points or 1.27 percent to 26,739.03.

The Australian All Ordinaries rose 87.70 points or 1.20 percent to 7,391.00.

In New Zealand, the S&P/NZX 50 firmed 60.46 points or 0.54 percent to 11,267.39.

South Korea's Kospi Composite added 46.95 points or 1.81 percent to 2,639.20.

On foreign exchange markets, the U.S. dollar continued to retreat. The euro rose to 1.0554 in early European trading Friday. The British pound edged up to 1.2462. The Japanese yen was in demand at 127.91. The Swiss franc firmed to 0.9741.

The Canadian dollar was steady at 1.2801. The Australian dollar advanced to 0.7050. The New Zealand dollar edged up to 0.6395.

Overnight on Wall Street, the Dow Jones industrials index declined 236.94 points or 0.75 percent to 31,253.13.

The Nasdaq Composite slipped 29.66 points or 0.26 percent to 11,388.50.

The Standard and Poor's 500 fell 22.89 points or 0.58 percent to 3,900.79.