Tokyo: Asian shares look set to post a third straight weeks of gains on Friday as investors scaled back cautious bets on the global economy after a string of positive US economic data and a recovery in oil and commodity prices. The rebound in risk asset prices could continue if the upcoming US employment report points to solid job gains, but not strong enough to encourage rate rises in the near term.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.1 percent, hovering just below its two-month high hit the previous day. Japan's Nikkei .N225 slipped 0.3 percent. "Globally markets are rolling back the extreme risk-off trading they did in January and February. Part of the reason is that the Fed seems to be easing its insistence on raising rates," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. On Thursday MSCI's world equity index covering 46 markets .MIWD00000PUS touched a two-month high.
The rally was led by emerging markets, with a measure of emerging-markets shares .MSCIEF rising 1.4 percent on Thursday for a fifth day of gains, its longest winning streak this year. The biggest move came from Brazil's Bovespa index .BVSP, which rose more than 5 percent, its biggest gain in six years, on news that President Dilma Rousseff could be implicated in a sweeping corruption scandal.
That encouraged investors who blame her administration's policies for driving Brazil in deep recession. On Wall Street, S&P 500 Index .SPX rose 0.35 percent to a two-month high of 1,993.4.
The US data published on Thursday was positive on the whole, with factory orders rising and the service sector index showing a continued expansion. Somewhat dimming the optimism, however, the service sector survey showed the employment in the industries fell in February for the first time in two year.
But that was not necessarily bad for US stocks, as it helped to reduce expectations of the Federal Reserve's rate hikes and pushed the dollar lower. The dollar's index against a basket of six major currencies .DXY =USD stood at 97.656, having slipped 0.6 percent on Thursday.
The euro EUR= jumped back to $1.0947 from Wednesday's one-month low of $1.08255. The yen JPY= traded at 113.59 to the dollar, recovering from Wednesday's two-week low of 114.56. Gold XAU= hit a 13-month high of $1,268.30 per ounce
The Australian dollar AUD=D4 stood at $0.7353, holding firm near a three-month high of $0.7374 hit on Thursday, helped by rising iron ore prices. The spot iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI hit 4 1/2-month high on Thursday.
Commodity prices have been on the mend, with oil prices recovering more than 30 percent from January's 12-year lows, helped by hopes of measures to ease global glut. Brent futures LCOc1 have risen 5.6 percent so far this week to two-month highs of $37.40 per barrel while US crude futures CLc1 have risen 5.9 percent and last stood at $34.69.
