Japan’s Nikkei 225 ended just short of breaching the 40,000 level, leading gains in Asia stocks on Friday, while China markets rose as investors digested manufacturing data from the mainland.

Japan’s Nikkei 225 hit a fresh record high, closing 1.9% higher at 39,910.82. The broader Topix index added 1.3% to end at 2,709.42 — it rose 1.8% for the week.

Official data showed China’s February manufacturing PMI at 49.1, in line with a Reuters Poll forecast. The private Caixin manufacturing final PMI came in at 50.9, slightly higher than the previous month’s 50.8.

A PMI reading above 50 indicates expansion, while below that denotes a contraction.

China’s CSI 300 closed 0.6% higher at 3,537.8, extending gains after closing almost 2% higher in the last session. The index was up 1.4% for the week.

Hong Kong’s Hang Seng index was 0.4% higher, still set for a weekly decline of 0.9%.

In Australia, the S&P/ASX 200 ended 0.6% higher at 7,745.60. The index rose 1.3% for the week.

South Korea markets were shut for the Movement Day holiday.

Overnight, the Nasdaq Composite clocked its first closing record since November 2021 on Thursday as tech and chip stocks rallied.

The tech-heavy index ended with gains of 0.90% to close at an all-time high at 16,091.92. The S&P 500 also closed at a record, rising 0.52% to hit 5,096.27. The Dow Jones Industrial Average ticked higher by 0.12%.

Data overnight showed, U.S. inflation rose in line with expectations in January, according to a key gauge the Federal Reserve uses to assess inflation.

The personal consumption expenditures price index excluding food and energy costs rose 0.4% in January and 2.8% from a year earlier, in line with the Dow Jones consensus estimates.

— CNBC’s Hakyung Kim and Samantha Subin contributed to this report.