The majority of Asian stocks saw gains overnight, with technology companies leading the way after Nvidia's overnight advance. Meanwhile, Japanese markets surged as lacklustre data on producer inflation countered the Bank of Japan's hawkish signals.

Following their American counterparts, regional technology stocks saw a surge as NVIDIA CEO Jensen Huang highlighted the robust demand for artificial intelligence. Chipmakers reaped the most of the gains.

However, U.S. stock index futures were flat during Asian trading due to a more dire forecast for interest rate reduction following a stronger-than-expected figure on consumer inflation. The Federal Reserve was observed preparing the markets for a 25 basis point rate drop the following week.

With gains ranging from 2% to 3%, Japan's Nikkei 225 and TOPIX indices were by far the top performers in Asia on Thursday.

As August's producer price index inflation data came in lower than anticipated, Japanese equities gained ground.

The reading cast doubt on previous statements made by BOJ officials that higher interest rates are necessary, particularly in light of the fact that future rate increases by the BOJ are mostly dependent on rising inflation.

Analysts are unsure about whether the BOJ will raise interest rates once again when it meets next week. However, weaker inflation reduces the central bank's imminent need to hike interest rates.

Naoki Tamura, a board member of the BOJ, stated on Thursday that in order to reduce the danger of inflation, the bank must raise interest rates to at least 1%.

Japanese markets were helped by a surge in tech equities, while tech-heavy Asian stock exchanges saw comparatively larger increases.

Tech, and chipmakers in particular, surged in tandem with Nvidia's over 8% overnight recovery, as the company's CEO's remarks reinforced the idea that demand for AI will sustain tech values even if the overall economy deteriorates.

Gains in Asian markets were far more muted than in the IT sector. Australia's ASX 200 saw a 0.7% increase, and after the index fell on Wednesday, futures for India's Nifty 50 index indicated a mediocre opening.

The primary focus today will be on the European Central Bank decision later in the afternoon. The markets have already priced in a 25bps cut but traders are looking for insight on whether a cut is likely at the next meeting in October.

(Sources: investing.com, reuters.com)