Japan's Nikkei share average <.N225> led the way, climbing 2.0
percent while Australian shares <.AXJO> tacked on 0.6 percent to
edge near a five-year peak hit in October.
MSCI's broadest index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> advanced 0.6 percent.
On Wall Street, the S&P 500 <.SPX> rose 0.6 percent, cheered by
Markit's preliminary U.S. Manufacturing Purchasing Managers Index
accelerating to its best level in four years.
S&P futures in Asia pointed to further modest gains.
"The market thinks for now that underlying U.S. economic trend
remains strong and things will get better in the spring, when it
gets warmer," said Sho Aoyama, senior market economist at Mizuho
Indeed, another manufacturing data by Philadelphia Fed's showing a
surprise contraction did little to change the view that extremely
cold weather and massive snowstorms are to blame for softness in
recent U.S. data.
On the other hand, Thursday's survey painting a grim picture of
China's manufacturing sector cast shadows over emerging markets,
many of which were roiled by sharp selloffs last month.
Mexican shares hit a three-month low <.MXX> while the rouble hit
five-year low, with the latter under pressure from unrest in
The Chinese yuan fell 0.2 percent. It has slipped to 11-week lows in
recent sessions as the central bank was seen pushing the yuan weaker
in a likely prelude to widening its trading band and as emerging
market currencies weaken.
The 10-year U.S. Treasuries yield edged up to 2.75 percent,
extending its rise from three-month low of 2.57 percent following
the positive data and ahead of the government's debt sales next
The U.S. dollar also recovered thanks to the strong U.S.
manufacturing survey, with the dollar's index against a basket of
currencies rising to 80.30 <.DXY> from a eight-week low of 79.927
hit on Wednesday.
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That saw the euro slipping to $1.3718, from a seven-week high of
$1.37735 hit on Wednesday, with a dip in the euro zone's business
surveys adding pressure on the single currency.
Against the yen, the dollar was little changed at 102.33 yen.
U.S. crude oil inched down from a four-month high touched on
Wednesday on a smaller-than-expected fall in U.S. heating oil
stockpiles as well as the soft Chinese manufacturing survey.
Further tension in emerging economies could direct investors'
attention to the Group of 20 finance ministers meeting in Sydney
Some developing countries have criticized the U.S. Federal Reserve
for not paying enough attention to the impact on emerging markets
when the U.S. central bank reduces its stimulus.
As investors expect the Fed to gradually reduce its stimulus, many
emerging markets that have relied on foreign capital and benefited
from cheap dollar funding came under attack from speculators last
(Additional reporting by Pete Sweeney in
Shanghai; editing by Shri Navaratnam & Kim Coghill)
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