MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS rose 0.5 percent after European shares
rallied to six-month highs and U.S. stocks closed at multi-year highs on
Thursday.
Japan's Nikkei stock average .N225 opened
up 1.6 percent. .T
The euro traded at $1.2632, not far from a
near 10-week peak of $1.2652 hit on Thursday. It stood at 99.65 yen, just below
a two-month peak at 99.80 yen touched on Thursday.
Risk-sensitive commodity currencies were
firmer, with the Australian dollar at $1.0281 after jumping nearly 1 percent to
$1.0300 on Thursday, its biggest one-day gain in a month.
The safe-haven Japanese yen was on the
defensive, trading at 78.88 yen, after falling to a two-week low of 79.04 yen
on Thursday as the dollar gained on higher U.S. Treasury yields.
"The ECB's action has been priced in
after earlier reports and contained nothing new, but there was no 'selling the
fact', probably because currencies followed the rally in stocks. It appears
markets are warming up to a risk-on mode," said Hiroshi Maeba, head of FX
trading Japan for UBS in Tokyo.
"Markets may be sensing that while it
takes time to deliver, things will get done eventually. Also, firm U.S. data
put great emphasis on the payrolls data today," he said.
A strong payrolls could bolster the dollar
and help sustain the positive momentum generated by the ECB, while a weak
report could turn around the mood completely, he added.
The ECB agreed on Thursday to launch a new
and potentially unlimited bond-buying program, focused on bonds maturing within
three years in countries implementing approved fiscal austerity measures.
ECB President Mario Draghi said the plan
would not target specific bond yields. Debt purchases would follow on from the
bank's Securities Markets Programme that has been dormant since March, and
would be suspended if countries did not comply with the terms.
Government debt yields in highly indebted
Spain and Italy fell while safe-haven U.S. Treasury and German bond yields
jumped, as the ECB's plan was seen reducing the risk of the euro zone slipping
deeper into chaos.
Market sentiment also improved after data
showed U.S. private employment rose more than expected in August and growth in
the services sector gathered pace.
The solid employment report precedes the
government's nonfarm payrolls report due later on Friday, with expectations it
will show 125,000 jobs were added in August.
A stable labor market would reduce pressure
on the Federal Reserve to take aggressive monetary easing at its September
12-13 policy meeting, such as a third round of bond buying known as
quantitative easing, to underpin growth.
"If the U.S. non-farm payrolls match
the ADP report, then it may have an even better effect than a third round of
quantitative easing. It will be like getting rid of a cold without having any
medicine," said Rhoo Yong-seok, head market analyst at Hyundai Securities
in Seoul.
Spot gold held near $1,700 an ounce after
climbing above that level for the first time in six months on Thursday.
Expectations for a more accommodative U.S. monetary stance have underpinned
gold prices.
U.S. crude fell 0.7 percent to $94.86 a
barrel, while Brent fell 0.6 percent to $112.86.
Asian credit markets gained strongly, with
the spread on the iTraxx Asia ex-Japan investment-grade index tightening by 8
basis points.
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