Asian stocks advanced Wednesday in thin Lunar New Year trading following a rebound on Wall Street driven by tech stocks as the panic over Chinese AI company DeepSeek faded. Most markets in Asia were closed for holidays.

Asian markets rose in holiday-thinned trade Wednesday, tracking a rally on Wall Street, where tech titans led by Nvidia recovered some of their hefty losses a day earlier as worries over Chinese AI startup DeepSeek subsided.

Giving explicit advance signals, in addition to making the Bank of Japan feel boxed in, could breach Japanese law stipulating the nine-member board must debate and sign off on rate decisions at each policy meeting.

Tokyo-listed companies linked to the AI sector tanked for a second straight day as investors tracked a rout on Wall Street that saw Nvidia Corp crumble 17 percent, wiping more than half a trillion dollars off its market capitalization.

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The Bank of Japan raised its key interest rate to about 0.5% from 0.25% Friday, noting that inflation is holding at a desirable target level.

About 85.7% of Japanese households expect prices to rise a year from now, a quarterly central bank survey in December showed on Friday, roughly unchanged from 85.6% in the previous poll in September.

Nvidia and other U.S. tech stocks are holding steadier but still flipping between gains and losses a day after tumbling on doubts about whether the artificial-intelligence frenzy really needs all

An interest-rate decision by the Bank of Canada is due Wednesday, on the same day as the U.S. Fed's decision. A 25 basis-point rate cut is widely expected, although the pace of rate reductions is expected to slow markedly compared with last year.

The Bank of Japan is expected to raise interest rates on Friday to levels unseen since the 2008 global financial crisis, as a broad worldwide stocks rally calms policymakers' fears U.S. President Donald Trump's tariff threats could upend markets.

The return of inflation and wage growth is giving the Bank of Japan room to raise interest rates and declare the end of a long period of stagnation.

The dollar firmed against major currencies on Tuesday on new U.S. tariff threats, giving traders little time to catch their breath after Monday's big risk-off moves sparked by the emergence of a low-cost Chinese artificial intelligence model.