Asian stock markets rose on Thursday, buoyed by strong corporate earnings and as the Federal Reserve expressed cautious optimism about the strength of the U.S. economic recovery.

Japan's Nikkei <.N225> was up 0.7 percent at 10883.53 points and Australia's benchmark index <.AXJO> was also higher by 0.2 percent. The MSCI's index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> added 0.3 percent.

Minutes of the Fed's Jan 25-26 policy session on Wednesday showed officials were more confident on economic recovery, though the job market recovery remained a concern.

Wall Street ended higher with the Dow Jones industrial average <.DJI> closing half a percent up, helped by strong results from Dell Inc which beat market estimates, sending its shares up by 11.9 percent.

The MSCI All-Country index rose 0.3 percent to a 30-month peak.

The mood in global equity markets is extremely positive and if external circumstances don't change much, the current rally can carry on until the Nikkei reaches 11,000, said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.

Japanese shares have gained some 6 percent this year, making it the best-performing Asian market so far in 2011, while Asian stocks outside Japan <.MIAPJ0000PUS> are down more than 2 percent on the year to date, largely due to inflation worries and outflows from emerging markets into developed ones.

Brent crude surged to near 2-1/2 years highs above $104 a barrel and U.S. crude for March delivery climbed as high as $85.95 a barrel as anti-government protests spread to other countries in the Middle East.

The rising tensions pushed gold prices higher which was set for a fourth consecutive day of gains.

In the currency markets, the dollar was little changed after weakening in the previous session on news that Iranian warships were en route to Syria. The reports added to resurgent geopolitical tensions in the Middle East, sparking a surge in traditional safe-haven currencies such as the Swiss franc.

Sterling was still nursing losses as investors revised expectations for a rate rise after the Bank of England downgraded its economic growth forecast in its quarterly inflation report, even as consumer prices spiked higher.

(Additional reporting by Umesh Desai and Antoni Slodkowski in Tokyo)

(Editing by Kim Coghill)

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