HONG KONG Reuters Asian stocks rose to a four-month high on Friday as some investors were inspired by positive U.S. and Japanese economic data to pick out bargains, with the shift to riskier assets weighing on the yen.
The yens yield disadvantage has also been growing this week, following upside surprises in U.S. and Australian economic figures, handing dealers an incentive to join any selloffs of the Japanese currency.
"The market is on a relief rally as key U.S. data, such as jobs and trade from the U.S., came out better than expected," said Hong Soon-pyo, an analyst at Daishin Securities in Seoul.
"The data gave the market more assurance about where the global economy is headed," Hong said.
U.S. stocks posted modest gains on Thursday as recent data eased concerns that the U.S. economy might be sliding back into recession, although sentiment was fragile as investors fretted over the health of European banks. .N
An upward revision to Japans second-quarter GDP, though widely expected, added to investor confidence in Asia, market players said.
Also on Friday, China reported stronger-than-expected import growth in August, indicating a possible rebound in domestic demand, and a 34.4 percent rise in exports year-on-year.
The import data reduced the politically sensitive trade surplus ahead of U.S. Congressional hearings next week on whether to punish Beijing for what many in Washington see as an unfairly undervalued yuan.
The Chinese data also bolstered currencies of major commodity exporters such as Australia, helping the Aussie dollar hold near a four-month high of $0.9227.
Still, risk taking has not become overwhelming by any stretch. Economists keep ratcheting down U.S. economic forecasts, corporate executives sound cautious and some of Europes banks may need more capital soon.
Tokyos Nikkei share average rose 2 percent .N225, with exporter Canon Inc the biggest gainer on the day, up 5.9 percent. The index is on its way to its biggest week increase since the week of July 11.
The MSCI index of Asia Pacific stocks outside Japan rose 0.4 percent .MIAPJ0000PUS to the highest since May 4, with the technology sector leading the pack.
The index is up nearly 11 percent in the quarter, on track for the largest gain since the third quarter of 2009.
The U.S. S&P 500 index overnight .SPX rose 0.5 percent and broke above its 100-day moving average, a medium-term obstacle, revealing its 200-day moving average only 1 percent away as the next significant barrier.
YEN
The yen suffered from traders closing out of short-term bets on the currency and hastening its decline.
The U.S. dollar rose 0.5 percent to 84.23 yen, pulling further from a 15-year low around 83.32 yen hit on Wednesday.
The U.S. dollar index, which measures its trade-weighted value compared with six other major currencies, rose 0.2 percent .DXY, climbing above its 55-day moving average, a technical obstacle the index has struggled to overcome in the last three weeks.
Investors betting on the yen have grown concerned about the moves in bond spreads that have gone against the Japanese currency. Overnight a lower-than-expected reading of U.S. initial jobless claims pushed up Treasury yields.
The spread of U.S. 10-year Treasury yields over Japan has widened 6 basis points this week, the biggest weekly gain since July 2010. Australian 2-year yields have shot up 22 basis points above same maturity Japanese yields this week, the largest increase since March 2010.
"Of course this could prove to be a false break particularly given doubts surrounding the fall in initial jobless claims but we would note U.S. yields appear to have been basing for a number of weeks now," Jonathan Cavenagh, strategist with Westpac in Sydney, said in a note.
"Hence if the yield spread continues to move in favor of the USD then USD/JPY is a good buy at current levels."
U.S. crude oil futures jumped more than 50 cents to near $75 a barrel after a leak forced the shut down of the biggest pipeline supplying Canadian oil to refineries in the Midwest.
Gold fell $2.52 an ounce to $1,245.75 an ounce, holding near a 1-week low hit the previous session.
Additional reporting by Jungyoun Park in Seoul
Editing by Kim Coghill
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