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 MSCI's broadest index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> rose 0.7 percent, a day after the index posted its
biggest gains in over two months. The index bounced 2.0 percent from
a five-month low hit on Wednesday.
Japan's Nikkei also rose 1.7 percent <.N225>, extending its rebound
from a four-month low hit earlier in the week.
Mainland China shares fell 0.2 percent <.SSEC> from a week ago after
the week-long lunar new year holiday.
A drop in applications for U.S. unemployment insurance and strong
earnings helped Wall Street shares post their best day of the year
on Thursday while European shares also jumped.
Initial claims for U.S. state unemployment benefits declined 20,000
last week to a seasonally adjusted 331,000, below economists' median
forecast of 335,000.
While the data has no direct bearing on January's employment report,
as it falls outside the survey period, it buoyed the mood after the
recent rout in emerging economies raised fresh concerns about the
global growth outlook.
"Risk sentiment will recover when the market can be assured that the
Chinese economy is doing all right and that U.S. economic growth is
firm," said Tomoaki Shishido, fixed income analyst at Nomura
Securities.
For many investors who have been expecting the developed economies,
especially the United States, to lead the global economy this year,
solid evidence of strong U.S. job growth is vital to maintain
conviction.
More so after a surprisingly downbeat report for December raised
concerns U.S. growth may not be solid as some investors had hoped.
Economists expect a payroll increase of 185,000 in January.
"The non-farm payrolls report is always an important release for the
U.S. dollar but this month in particular, it could make or break the
greenback," Kathy Lien, managing director at BK Asset Management,
said in a note to clients.
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Relative calm in vulnerable emerging markets over recent days also
helped to ease worries some emerging economies might suffer harsh
downturns if capital flight continues.
Battered currencies such as the Turkish lira and the South African
rand are trading off their recent lows.
"Compared to the Latin American crisis or the Russian crisis in
1990s, most countries have large forex reserves. So I do not think
we will see a major crisis this time," said Tetsuro Ii, the
president of Commons Asset Management.
The euro held near a one-week high against the dollar after European
Central Bank President Mario Draghi said on Thursday that the euro
zone was not plagued by deflation.
He did, however, caution that the currency bloc's economy remained
skewed to the downside and put markets on alert for a possible rate
move in March, acknowledging that emerging-market turbulence could
hit the euro zone.
The euro traded at $1.3592, having risen as high as $1.3619 on
Thursday, its highest level in a week.
Improved risk appetite prompted the yen to step back further from a
10-week high hit earlier in the week when concerns over emerging
markets were heightened.
The dollar traded at 102.00 yen, off a low of 100.755 yen marked on
Tuesday.
(Additional reporting by Lisa Twaronite;
editing by Shri Navaratnam and Eric Meijer)
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