Asia shares rise after ECB, focus on payrolls

TOKYO: Asian shares rose and the euro steadied on Friday after the European Central Bank
outlined its bond-buying scheme to help calm the euro zone's debt
crisis, while firm U.S. data fed speculation of a strong jobs report
later in the day.
MSCI's broadest index of Asia-Pacific shares
outside Japan 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 opened up 1.6 percent.
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 Thusday to launch a new and potentially unlimited
bond-buying programme, 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 labour market would reduce
pressure on the Federal Reserve to take aggressive monetary easing at
its Sept. 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. - Reuters