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Asia-Pacific equities rose to their highest level since mid-February on Friday, taking cues from an overnight Wall Street rally as market bets firmed for the Federal Reserve to skip a rate hike next week.

Japanese and Australian bond yields followed those on U.S. Treasuries lower, and the dollar remained on the defensive early in the Asian session.

MSCI's broadest index of Asia-Pacific shares added 0.6%, and at one point touched its strongest level since Feb. 16.

Much of that was driven by a 1.66% jump in Japan's Nikkei, which rebounded strongly following its plunge from a 33-year high in the previous session.

Hong Kong's Hang Seng added 0.21%, while mainland Chinese blue chips edged 0.1% higher.

On Wall Street, gains were led by the tech-heavy Nasdaq, which surged 1.27%. The broader S&P 500 rose 0.62%. E-mini U.S. equity futures in Asia pointed to about a 0.1% lower restart for each of the indexes.

Traders now lay 1-in-4 odds for the Fed to raise rates by a quarter point on June 14, versus 75% probability of a pause. However, the market sees a hike as mostly assured by the July 26 decision, laying the odds at about 80%.

Bets for a pause were supported by data overnight showing the number of Americans filing new jobless claims surged to a more than 1 1/2-year high.

Still, some analysts point to surprise rate increases at the Bank of Canada and Reserve Bank of Australia this week as reasons not to be complacent.

"I wouldn't go all in and say we're going to get a rate hike, but I think we should be at least 50% priced," said Tony Sycamore, an analyst at IG Markets in Sydney.

"I know people can point to Fed Chair (Jerome) Powell's comments as being more supportive of a hold than a hike, but there have been some interesting developments since he last spoke," Sycamore added.

"I can't imagine he'd be happy by the increase in core PCE inflation, nor the robust gain in non-farm payrolls."

Powell said on May 19 that it was still unclear if U.S. interest rates will need to rise further, and the risks of overtightening or undertightening had become more balanced.

Two-year Treasury yields, which are extremely sensitive to monetary policy expectations, were little changed at around 4.53% in Tokyo after a 3 basis-point (bp) decline by the New York close. The 10-year yield edged up to 3.73% after tumbling 7 bps overnight.

The U.S. dollar index, which measures the currency against a basket of six major peers, was little changed at 103.34, sticking close to the more than two-week low of 103.29 reached on Thursday.

The dollar added 0.15% to 139.135 yen, after earlier slipping to a one-week low of 138.765.

The euro was flat at $1.0784, just below Thursday's two-week high of $1.0787.

Elsewhere, the Turkish lira extended its decline to a new record low of 23.54 per dollar, even as President Tayyip Erdogan's appointment of a U.S. banker as central bank chief sent a fresh signal for a return to more orthodox policy.

Crude oil remained on the back foot on Friday following a report that the United States and Iran were close to a nuclear deal, although denials from both parties

Optimism for a deal, which reportedly included scope for an additional 1 million barrels per day of Iranian production, had eknocked down West Texas Intermediate (WTI) crude by $3.50 to just shy of $69 at one point on Thursday.

WTI fututes were last 47 cents weaker than Thursday's close at $70.83. Brent crude futures were off 47 cents at $75.49.