Updated from 5:02 a.m. EDT

Asian stocks closed higher Thursday, with South Korea leading the way with an increase of 12.5%, after a number of countries in the region followed the U.S. in cutting interest rates.

Hong Kong, Taiwan and China slashed rates, and Japan is reportedly expected to do the same on Friday.

The Federal Reserve slashed a key lending rate to 1% on Wednesday, and also announced four new swap currency lines of $30 billion each with South Korea, Singapore, Brazil and Mexico.

Japan's benchmark Nikkei 225 stock average finished higher by almost 10%. Shares of exporters such as Toyota ( TM) and Sony ( SNE) were higher as the yen fell vs. the dollar. The Hang Seng index in Hong Kong rose 12.8%, and the S&P/ASX 200 in Australia closed to the upside by 4%.

Japan's Prime Minister Taro Aso is expected to announce Thursday a package of steps to fight fallout from the global financial crisis on Japan's economy, Reuters reports. Aso's announcement coincides with growing expectations Japan's central bank will cut interest rates for the first time in seven years when its policy board meets on Friday.

Stocks in Europe were higher after Alcatel-Lucent ( ALU) reported a narrower quarterly loss and Unilever ( UN) reported an increase in third-quarter profits.

The FTSE 100 index in London rose 0.8%, while the DAX in Frankfurt rose 2.4%

Futures in the U.S. were indicating a higher open for stocks on Wall Street Thursday. S&P 500 futures rose 25.40 points to 952.40, and were 23.23 points above fair value. Nasdaq futures rose 29.75 points to 1323.75, and were 18.76 points above fair value.

Stocks on Wall Street ended mixed Wednesday, after the Federal Reserve cut its target interest rate.

The Dow Jones Industrial Average, which rose almost 300 points in the final hour, plummeted from that session high as the close approached, ending down 74.16 points, or 0.8%, at 8990.96. The index has yet to post two consecutive days of gains this month. The S&P 500 lost 10.42 points, or 1.1%, to 930.09. The Nasdaq gained 7.74 points, or 0.5%, to 1657.21.

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