BHP Billiton, Rio Tinto and Woodside Petroleum jumped between 1.4 per cent and 3.5 per cent after commodities including copper, oil and iron ore rose between 0.6 per cent and 1.3 per cent early yesterday.
Among iron ore pure plays, Fortescue Metals surged 7.3 per cent and Atlas Iron jumped 9.2 per cent.
Major banks rose 1.4-2.7 per cent, and Telstra jumped 2 per cent, amid growing expectations that Japanese investors will seek higher yields offshore as the Bank of Japan ramps up its money-printing.
Ten Network lifted 2c to 31.5c, despite the broadcaster posting a $243.3 million first-half loss.
The S&P/ASX 200 closed up 1.5 per cent at 4976.8 points, near a four-day high. Share-trading value swelled to $5.5 billion, from $4bn on Monday.
Yesterday's substantial rise in the index followed a 5.4 per cent fall in the past three weeks that was generally viewed as a necessary pullback after the index rose 30 per cent since June last year, outstripping expected earnings growth.
"I don't necessarily think it's 'game back on', but we could see some of the pessimism coming out of the resources sector," CMC Markets chief market analyst Ric Spooner said.
Lower-than-expected inflation in China fuelled expectations that Australia's No 1 trading partner had room to grow without sparking inflation.
China's CPI rose 2.1 per cent on-year in March, versus 2.4 per cent expected, assuaging concerns about inflation that led China to slow its economy in recent years.
"This might allow China to steer a middle path between tightening up on the property market and keeping growth ticking along in the face of moderate world growth and increasing export competition from Japan," Mr Spooner said.
"It takes pressure off authorities to bear down on the whole economy, rather than those parts they're concerned about, and it allows them, if necessary, to do some targeted stimulus."
The implications are bullish for domestic resources equities.
"My strong view is that the fall in iron ore miners has been overdone, and the iron ore price is holding up well because India is still importing and China has low stockpiles and high steel production," said Christopher Macdonald, investment adviser at RBS Morgans. "If Japan succeeds in increasing exports, it also increases demand for raw materials, which is important for Australia."
Sundance Resources dived 48 per cent after a takeover bid from China's Hanlong Group collapsed.
The dollar was stronger yesterday, reaching a near five-year high against the yen, while lower-than-expected Chinese inflation data boosted market confidence regionally. At 5pm AEST, the dollar was trading at $US1.0424, up almost half a US cent. It also traded as high as Y=103.82 in Asia, its highest level since July 2008.
The strength of the dollar against the yen reflected the success of the Japanese government's policies to drive lower the country's currency in the hope of reinvigorating its export-dependent economy, traders said.
Uncertainty surrounds the Bank of Japan's activities, with billionaire investor George Soros telling a Chinese business forum that the expansion of quantitative easing in Japan was risky.
