The Japanese yen extended losses for a second day running, helping ease fears of a sharp yen carry trade unwind.

Japanese markets rallied, the yen weakened and Japan's 10-year government bond yield jumped to a 26-year peak after the Bank of Japan raised its key policy rate 25 bps to 0.75 percent, its highest level since September 1995, signaling a broader policy shift amid rising uncertainties surrounding the U.S. economy and trade policies.

Data showed earlier in the day that Japan's consumer inflation remained well above the central bank's 2 percent target in November.

The Nikkei average jumped 1.03 percent to 49,507.21 while the broader Topix index settled 0.80 percent higher at 3,383.66.

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