All eyes were on US data later in the session that may show core inflation growing 0.3 percent in September on a monthly basis, pushing the annual rate lower to 3.7 percent from 3.9 percent a month ago.

Overnight, the European Central Bank left interest rates unchanged as expected, sending the euro briefly to a two-week low. The dollar is trading above the critical 150-yen level, with traders on guard for any signs of intervention ahead of the Bank of Japan policy meeting on Tuesday.

S&P 500 futures rose 0.4 percent while Nasdaq futures rallied 0.7 percent, driven by a 5 percent jump in Amazon shares in after-hours trading. In a statement after the US close, the tech giant predicted higher holiday season sales and a stabilisation in its cloud business.

MSCI's broadest index of Asia-Pacific shares outside Japan bounced 0.6 percent on Friday after hitting a fresh 11-month low a day ago. It is, however, on track for a weekly loss of 1.2 percent.

Tokyo's Nikkei rose 1 percent, but was still down 1.2 percent for the week.

China's blue chips were flat, while Hong Kong's Hang Seng index surged 1 percent.

US data overnight confirmed a resilient economy with inflation easing, feeding soft landing hopes. The US economy grew almost 5 percent in the third quarter, but a slowdown in expected from here.

"The US economy once again surprised on the upside with US GDP accelerating in the third quarter of 2023," said Nathaniel Casey, an investment strategist at wealth management firm Evelyn Partners.

"However, as rising real yields continue to add pressure to the real economy, the resulting drag on consumption should start to put the brakes on the US economy heading into the coming quarters."

Much attention was on underlying inflation, which subsided considerably last quarter, fuelling hopes that the closely watched US personal consumption expenditures (PCE) for September on Friday - the Fed's preferred gauge of inflation - are likely to surprise on the downside as well.

Goldman Sachs lowered its forecasts for monthly core PCE by 1bp to 0.27 percent and headline PCE estimate by 1bp to 0.33 percent.

CME FedTool showed that any probability for a rate hike in November has been wiped out and traders trimmed bets for a December hike to 19.8 percent, compared with 29.3 percent a day earlier. Rate cuts next year are seen at about 70 basis points.

The benchmark yield on 10-year Treasury notes was up 2 basis points to 4.8657 percent after easing 10 basis points overnight. It breached 5 percent on Monday for the first time in 16 years.

The yen hit a fresh one-year low of 150.77 per dollar overnight and was last at 150.31. It was not far off the three-decade low of 151.94 it touched in October last year that led Japanese authorities to intervene in the currency market.

Speculation that the BOJ could raise an existing yield cap at its meeting next week is also keeping traders on edge.

Gold prices were flat at $1,985.79 per ounce, not far off a 2-1/2 month high of $1,997.09 hit earlier this month, as investors sought safe-haven assets amid the ongoing conflict in the Middle East.

Oil prices were higher on Friday, regaining ground after tumbling more than $2 a barrel in the previous session. They are, however, set for the first weekly drop in three weeks as the geopolitical premium built on fears that the Israel-Gaza conflict could spread and disrupt oil supply eases.

Brent crude futures climbed 0.5 percent to $88.38 a barrel while US West Texas Intermediate was at $83.58 a barrel, up 0.4 percent.