TOKYO Asian shares recovered but were capped on Friday ahead of Chinese manufacturing and U.S. nonfarm payrolls reports due later in the session that will offer more clues about the health of global economies, while the yen hit new lows.
The MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up 0.2 percent after falling 0.2 percent on Thursday, taking a breather from a rally that lifted the index to a near 18-month high earlier in the week. The index ended January with a 2.8 percent gain.
Australian shares resumed their upward track on Friday, rising 0.7 percent as major mining stocks gained on a jump in iron ore prices. Australian shares snapped a 10-day winning streak on Thursday, the longest in more than nine years.
South Korean shares .KS11 opened up 0.1 percent and were seen moving in ranges as investors struggle to find catalysts before the U.S. and China data, although South Korea is reporting a batch of its own indicators on Friday.
"Today's market will not be fun and will move in a limited range," said Kim Hak-kyun, an analyst at KDB Daewoo Securities, of Seoul shares.
China's official purchasing managers' index in likely rose at its fastest pace in nine months to 50.9 in January from December's 50.6 for a fourth consecutive month of accelerating activity in the country's vast manufacturing sector.
The United States nonfarm payrolls report is forecast to show a rise of 160,000 jobs and the unemployment rate to remain steady at 7.8 percent.
U.S. stocks edged lower on Thursday on caution ahead of the jobs report, but the benchmark Standard & Poor's 500 Index .SPX posted its best monthly gain since October 2011 with a 5.1 percent rise and the best January showing since 1997.
Japan's benchmark Nikkei stock average .N225 opened up 0.5 percent after closing at a fresh 33-month high on Thursday. .T
A weak yen is expected to underpin Japanese equities.
"We are expecting a positive note in the morning," said Yutaka Miura, a senior technical analyst at Mizuho Securities. "But the market could trim gains later as investors may take profits from the recent gains before the weekend, but overall, sentiment is positive."
The dollar steadied around 91.72 yen, having earlier risen as high as 91.82, a level not seen since June 2010. The euro touched 124.93, its highest since May 2010. In January alone, the common currency surged nearly 9 percent on the yen, while the dollar was up more than 5 percent.
The euro was also stronger against the dollar, reaching a fresh 14-month high of $1.3618 on Friday. The single currency's strength has pushed the dollar index to a one-month low of 79.133 .DXY.
"The euro revival looks set to continue for some time, as investors return to euro zone bond markets, content with the combination of the European Central Bank backstop for sovereign risk and low inflation danger due to lack of economic growth. The dollar bloc looks to be a key loser in the portfolio reallocation back into EUR," Westpac bank said in a note.
U.S. economic conditions are mixed, with initial weekly jobless claims rising off five-year lows to levels consistent with tepid job growth, while U.S. income growth surged in December as companies hurried to make dividend payments before higher tax rates set in. The pace of business activity in the U.S. Midwest picked up in January from a more than three-year low the previous month.
U.S. crude futures inched up 0.1 percent to $97.62 a barrel. <O/R>
(Additional reporting by Ayai Tomisawa in Tokyo and Hyunjoo Jin in Seoul; Editing by Eric Meijer)
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