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The European Central Bank (ECB) announced aggressive liquidity measures on Thursday, throwing a lifeline to lenders who have seen wholesale funding drying up as market confidence ebbed, and the European Union said it would present a plan for a coordinated recapitalization of banks by member states.

Gold, oil, copper and equities were all on course to post weekly gains on hopes that Europe's leaders may finally be getting to grips with a two-year-old sovereign debt crisis, although the scale of the task meant caution remained high.

"There are still plenty of problems that face the European financial system," said Greg Gibbs, strategist at RBS in Sydney. "The risk rally will probably run out to steam in the next week."

Fears that the crisis is heading inexorably toward a default by Greece -- and possibly others -- that could trigger turmoil in the banking system have caused a sharp sell-off in riskier assets since late July.

AWAITING U.S. JOBS REPORT

Tokyo's Nikkei share average rose 1.1 percent on Friday, while MSCI's broadest index of Asia Pacific shares outside Japan climbed 2.8 percent, led by a 4.2 percent gain from the materials sector.

U.S. stocks rose more that 1.5 percent on Thursday, as global stocks posted their third straight day of gains.

S&P 500 index futures traded in Asia were mildly negative, indicating some caution ahead of the non-farm payrolls report later, a weekly jobs gauge that is always closely watched for clues on the state of the U.S. economy.

"No one wants to take a big position ahead of the U.S. jobs report later in case there is a downside surprise," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments in Tokyo.

Asian emerging markets have been punished hard in the market slide of recent months, with MSCI's Asia ex-Japan index falling more than 25 percent from its April high for the year, partly due to foreign fund managers taking money out of markets that had been outperforming to cover losses elsewhere.

Citigroup analysts said in a note that outflows from emerging market equity funds, which often set the overall market direction, had accelerated in the week to October 5, with a net $1.3 billion pulled from Asia.

RETURN OF RISK

The European Central Bank said on Thursday it was ready to buy bonds to provide longer-term cheap money for European lenders in need of funding.

And, in a further boost, European Commission President Manuel Barroso said the EU's executive arm was proposing coordinated action to cleanse banks of toxic assets, the most explicit statement yet from a top European official on joint action to help restore battered confidence in the sector.

The euro, which has fallen back from a 2011 peak near $1.50 in May, was steady around $1.3427, after jumping from a low of $1.3240 on Thursday.

While some investors were disappointed the ECB did not also cut interest rates, riskier assets such as equities, commodities and currencies linked to commodity markets, such as the Australian dollar, rallied.

Copper rose around 1.3 percent on Friday, extending a gain of nearly 6 percent in the previous session, but oil eased a little after a 3 percent bounce on Thursday.

Brent crude slipped 0.2 percent to $105.55 a barrel and U.S. crude was flat at $82.57.

As some confidence returned, credit markets tightened, with spreads measured by iTraxx's Asia ex-Japan investment grade corporate index coming in about 10 basis points, after a sharp widening at the start of the week.

Japanese government bonds eased, with the benchmark 10-year yield rising 1.5 basis points to 0.985 percent.

"If the U.S. jobs report shows strong figures, we may see more unwinding," said a fund manager at a Japanese asset management firm. "But a sharp correction in JGB prices is unlikely as investors' concerns are centered on the euro zone debt crisis, which will not be resolved easily."

(Additional reporting by Cecile Lefort in Sydney and Lisa Twaronite in Tokyo; Editing by Richard Borsuk)

Business as usual, or time for a change? The first signs of the future will be whether they choose an independent chairman and expand the number of directors.

Apple directors include heavy hitters, but they were seen offering advice to the chief executive rather than overseeing Jobs, who was known for persuading people to see things his way.

"The old message was "trust Steve," the new message has to be 'trust the team.' ... It's no longer the cult of personality." said Jim Post, a professor of corporate governance at Boston University School of Management who called for an independent chairman.

"The board needs to be expanded. They need to bring on additional independent talent ..., people who were not living in Steve's shadow," he said.

Apple's time frame for finding a new chairman -- and even whether it is seeking one -- is unclear. A spokesman declined to comment. Previously, Apple had no chairman but only co-lead directors.

Apple's board has long been criticized for its lack of disclosure, particularly about leadership succession as Jobs' battled illnesses whose details were not made public.

Jobs had also been reported to keep the board in the dark at times.

Even in his efforts to praise Jobs, Google Chairman Eric Schmidt and former Apple board member showed how complicated working with Jobs could be in an interview on CNBC Thursday.

"I remember meeting with him with a bunch of people on some technical matters, on which I was an expert," Schmidt said.

"He convinced me that I was completely wrong. We spent a whole hour trying to figure out why," said Schmidt. "He sees us and runs back out to continue to argue to make sure we see how right he is. That's the passion he had about being right and being excellent."

SOMEONE TO "STIR THE POT"

Apple Chief Executive Tim Cook, who is a likely candidate for chairman, arguably has enough to do for now.

"(Cook's) got too much on his plate now" to be chairman as well, said Jefferies & Co analyst Peter Misek.

Apple's board, with just seven current members, is one of the smallest and most opaque in the industry. Most of Apple's peers have boards that have 10 directors.

"Much like Disney, Apple's founder was the brand. He was their Mickey Mouse, he was their Betty Crocker," said corporate governance expert Nell Minow of GovernanceMetrics International. "They have to replace him in five different ways."

A bigger board would mean more experience and diversity.

A new, independent chairman also could help the company retain investor support, examine decisions and help Apple keep its edge in the hyper-competitive electronics business.

"Having a lead on the board is important and that person should be different to the lead of the company (the CEO)," analyst Colin Gillis of BGC Partners said. "It creates tension but it's a healthy tension."

"They need somebody who's going to stir the pot," said Jeffrey Sonnenfeld, Professor at the Yale School of Management.

(Reporting by Sinead Carew and Poornima Gupta and Liana Baker; Editing by Richard Chang)

The EU's executive arm said it would present a plan for member states to coordinate a recapitalization of their banks, as regulators met in London to reassess the capital buffers of stressed lenders that received a clean bill of health in July.

The European Central Bank threw a lifeline to commercial banks by turning up its liquidity pumps to provide longer-term cheap money for the growing number of European lenders which have seen wholesale funding dry up as market confidence ebbs.

The moves came amid fears that Greece, the most heavily indebted euro zone state, may default within months, setting off a chain reaction of sovereign downgrades and bank failures.

"We are now proposing member states to have a coordinated action to recapitalize banks and so to get rid of toxic assets they may have," European Commission President Jose Manuel Barroso said in a television interview relayed on YouTube.

It was the most explicit statement yet from a top European official on joint action to help restore confidence in a banking sector that is increasingly being shunned by investors as the euro zone debt crisis deepens.

However, a senior EU official told Reuters there would be no common European mechanism to deal with toxic assets, and no joint "bad bank" for Europe.

In a positive sign, the Dutch parliament voted in favor of an enhanced euro zone bailout plan -- leaving Slovakia and Malta the only euro zone members that still must put their legislative stamp of approval on changes agreed last July.

Some 96 of 150 members of the lower house of the Dutch parliament voted to uphold a beefed up European Financial Stability Facility (EFSF).

In Washington, Obama told a news conference that uncertainty about the euro zone crisis was hitting global markets and posed the biggest headwind to the U.S. economy.

Ratcheting up pressure on European leaders, he said he hoped they would have a concrete plan in time for a November 3-4 Group of 20 summit to overcome the debt crisis by creating enough "firepower" to help weaker member states.

Treasury Secretary Timothy Geithner told Congress in prepared testimony: "The critical imperative is to ensure that the governments and the financial systems under pressure have access to a more powerful financial backstop."

In the first case of a bank felled by the crisis, Franco-Belgian municipal lender Dexia's board will vote on a break-up plan on Saturday as the French and Belgian governments argue over how to split the cost to the taxpayer.

Barroso would not speculate on how much money would be needed for recapitalization across the 27-nation bloc but his comments helped push European shares up 2.4 percent on the day as investors welcoming signs of action.

The ECB disappointed some investors by leaving interest rates unchanged at 1.5 percent, on a split decision, despite signs of a sharp slowdown in the European economy. But it compensated with a raft of measures to boost liquidity.

ECB President Jean-Claude Trichet announced after chairing his final monetary policy meeting before retiring that the ECB will provide unlimited one-year funding in two operations and revive its policy of buying covered bonds for up to 40 billion euros.

SAME FATE?

German Chancellor Angela Merkel said Europe should not hesitate to recapitalize its banks if this prevents greater economic damage, and leaders would take very seriously expert advice that the time was ripe for such a step.

Jean-Claude Juncker, chairman of euro zone finance ministers, said banks in need of capital should turn first to the markets, then to national governments and as a last resort to the euro zone's rescue fund.

Some officials fear other lenders could suffer a similar fate to Dexia, even though they passed the European Banking Authority's (EBA) July stress test of 91 banks in the EU.

Those tests concluded that only eight banks failed and that they needed a collective 2.5 billion euros ($3.3 billion) -- a fraction of the up to 200 billion euros the International Monetary Fund believes EU banks require.

The EBA, which set the criteria for the tests carried out by national regulators, held the second day of a board meeting to review banks' capital needs based on the same data which formed the basis of those tests.

If the banks were forced to mark sovereign bonds holdings to current market prices, 18 would fail with a total capital hole of 40 billion euros, according to a Reuters Breakingviews stress test calculator.

EU Competition Commissioner Joaquin Almunia said there was a need to reassess bank assets, especially sovereign debt, to promote recapitalization, but public money should be used only as a last resort and in line with the bloc's state aid rules.

The EBA is preparing the ground by determining which lenders should be included in any coordinated recapitalization that its members would oversee. The European Commission has no power to impose a recapitalization plan on EU states.

Markets and industry officials say the key missing piece is whether enough money can be found fast enough to fund a recapitalization plan and stop contagion from Greece or Dexia.

"The euro zone knows what it needs to do and should just get on with it," a UK banking industry official said.

The EBA, made up of regulators and central bankers from EU member states, said it was asked by the European Systemic Risk Board last month to "coordinate efforts to strengthen bank capital.

It is under pressure after its chairman, Andrea Enria, admitted on Tuesday that this year's stress test, which Dexia passed with flying colors, failed to reassure investors.

Some banks have come under heavy criticism for not updating investors clearly on the value of their government debt holdings and bumping up capital buffers to cover markdowns.

(Additional reporting by Alister Bull, Dave Clarke and Rachelle Younglai in Washington, Huw Jones in London, Philip Blenkinsop and Jan Strupczewski in Brussels; Writing by Paul Taylor, editing by Mike Peacock, Ron Askew, Chizu Nomiyama)

Initial claims for state jobless aid climbed 6,000 to a seasonally adjusted 401,000, the Labor Department said, from 395,000 the prior week.

That left claims holding steady around the 400,000 mark, which is usually regarded as consistent with some improvement in the jobs market, for a second week. Economists, who had expected claims to rise to 410,000, saw this as yet another sign the ailing economy was not falling back into recession.

"Claims suggest that layoffs remain contained despite high uncertainty in the economy. We continue to expect moderate growth rather than a recession," said Guy Berger, an economist at RBS in Stamford, Connecticut.

The data falls outside the survey period for the government's closely watched employment report for September, which will be released on Friday.

Nonfarm payrolls likely increased 60,000 last month, according to a Reuters survey, after being flat in August.

The gain in nonfarm employment will mostly reflect the return of 45,000 striking Verizon Communications workers to payrolls. The jobless rate is seen steady at 9.1 percent.

U.S. stocks rose for a third day, while prices for government debt fell. The dollar was marginally weaker against a basket of currencies.

THREAT FROM EUROPE

The lofty level of unemployment has put downward pressure on incomes, weighing on consumer spending.

However, reports by U.S. retailers on Thursday suggested back-to-school sales were brisk last month, and 23 retailers posted an average sales gain of 5.1 percent at stores open at least a year, according to Thomson Reuters. Analysts were anticipating a 4.6 percent rise.

Data ranging from manufacturing to motor vehicle sales have also suggested that the economy, which expanded at a 1.3 percent annual rate in the second quarter, could avoid an outright contraction in output.

While the weak labor market remains the Achilles heel of the recovery, an even bigger threat is looming from Europe's debt crisis. Economists warn troubles in the euro zone could push the U.S. economy into a new recession.

Treasury Secretary Timothy Geithner said on Thursday Europe's debt crisis could significantly damage the U.S. economy, although major U.S. banks and money market funds have little direct exposure.

"Europe is so large and so closely integrated with the U.S. and world economies that a severe crisis in Europe could cause significant damage by undermining confidence and weakening demand," he said according to testimony obtained by Reuters.

The European Central Bank on Thursday took steps to pump more cash into the banking system in a bid to contain the debt problem.

Slow domestic growth prompted the Federal Reserve last month to announce a new measure designed to push long-term borrowing costs lower by shifting assets on its balance sheet.

Interest rates have dropped in response, with the 30-year fixed mortgage rate falling to a record low 3.94 percent this week, according to Freddie Mac.

Although the labor market stalled in August, it appears to have regained some footing in late September. The four-week moving average of initial claims -- considered a better measure of labor market trends -- fell for a second week.

"If initial jobless claims continue to trend lower that would be an encouraging sign that labor market conditions may be improving," said John Ryding, chief economist at RDQ Economics in New York.

The number of people still receiving benefits under regular state programs after an initial week of aid dropped to its lowest level since July in the week ended September 24.

A total of 6.86 million Americans were claiming unemployment benefits during the week ended September 17 under all programs, down 123,009 from the prior week.

(Editing by James Dalgleish)

* At 0851 GMT, futures for the S&P 500, Dow Jones and Nasdaq 100 were up between 0.7 and 0.9 percent.

* The FTSEurofirst 300 index of leading European shares was up 1.8 percent at 932.99 points, ahead of interest rate and policy decisions from the European Central Bank and Bank of England.

* The STOXX Europe 600 Banking Index rose 3.6 percent, extending gains after the European Union's executive proposed member states carry out a co-ordinated recapitalization of banks.

* Shares in Apple fell in early trade on the Frankfurt stock exchange, down more than 3 percent, after co-founder and former CEO Steve Jobs died following a long battle with cancer and other health issues.

* Initial jobless claims are expected to rise to 410,000 for the week ended October 1, up from 391,000. Continuing claims are seen rising slightly to 3.72 million from 3.71 million. The data comes ahead of Friday's all-important non-farm payrolls.

* Constellation Brands, the world's largest branded wine maker, will shed light on the state of consumer spending when it reports fiscal second-quarter earnings. Analysts expect a profit of 66 cents per share, up from 52 cents a year ago.

* On Wednesday, U.S. shares rose a second day, continuing a recovery from a slump that had seen the S&P 500 enter bear-market territory.

* The Dow Jones industrial average rose 1.2 percent; the S&P 500 added 1.8 percent; the Nasdaq Composite rose 2.3 percent.

(Reporting by Brian Gorman; Editing by David Hulmes)