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Benchmark 10-year U.S. Treasury yields held at 3.44 percent in Asia and futures rose after a push overnight toward a seven-month high close to 3.6 percent enticed bond buyers back into the market, confounding investors hoping for a trend to cling to in the final weeks of 2010.

December's reduced trading volumes and holidays typically cause whippy price action and make big bets difficult to hold for long.

Still, stocks in advanced markets were poised to keep a year-end rally going, even though Japanese equities unofficially closed marginally lower.

The Nikkei share average .N225 edged down 0.1 percent but was still up 10 percent in the final quarter of the year. It was on course for its biggest quarterly rise since the June quarter of 2009, lifted by foreign investors hovering up cheap shares.

Japan's gains have contributed to the 6.7 percent rise of the MSCI all-country world index .MIWD00000PUS, which exceeded the 3.8 percent advance of the emerging markets index.

Year-to-date, the U.S. S&P 500 index is up 11.5 percent .SPX compared with 11.9 percent for the MSCI Asia-Pacific ex-Japan index and 8.7 percent for the MSCI world index.

If the S&P were to end the year outperforming the MSCI Asia ex-Japan index, it would be first time that that had happened in a non-crisis year since 2000.

REVERSAL OF FORTUNE

The outperformance of developed markets has been a reversal of a trend in place for most of the year: the fundamental strength of emerging markets drawing money from advanced economies.

That is not to say the outlook for emerging markets, particularly in Asia, is anything but bright.

"Loose monetary policy in the U.S., debt concerns in Europe and strong growth in Asia coupled with rising inflationary pressures should maintain the status quo of Asian currency strength in 2011," Commerzbank analysts said in a note.

For now though clear signs of improvement in the U.S. economic outlook have taken some gloss off of developing markets.

After two days of falls, the MSCI index of Asia Pacific stocks outside Japan rose 0.4 percent .MIAPJ0000PUS on Friday, with gains evenly spread across the sectors.

Momentum-driven investors helped South Korean and Taiwanese stocks lead the small regional gains, with benchmark indexes climbing 0.8 percent .KS11 and 0.6 percent .TWII, respectively.

"It will result in a shift of more than six percent of quota shares to dynamic emerging market and developing countries and more than six percent from over-represented to under-represented countries," the IMF said in a statement.

Voting share in the global lender is important because it gives countries a chance to influence decisions about how money, raised through subscriptions from IMF members, is used.

The IMF said the 10 IMF members with the largest voting share in future will be the United States, Japan, the key emerging-market powers of China, Brazil, India and Russia as well as France, Germany, Italy and Britain.

By giving more voting power to countries like China and other emerging powers, "this reform will result in a Fund that better reflects realities," the IMF said.

Developed countries have stepped up efforts to have countries like China accept greater responsibility in global councils like the IMF while Beijing has chafed at contributing more unless its rising economic heft is recognized.

Emerging economies already have gained more clout in the IMF over the past five years, but the shift in voting power effectively amounts to a major overhaul of the global economic order established when the IMF was set up after World War Two.

The IMF said the changes will strengthen the lending institution's "legitimacy and effectiveness." The changes also double IMF member quotas, or subscriptions, boosting the lender's resources by about $733.9 billion at current exchange rates, the fund said.

The next step is for member countries to accept the proposed quota increases -- which in some cases will require parliamentary approval. The IMF said its members "will make best efforts to complete this" by October 2012.

"I urge all our members to proceed rapidly with the steps required to implement this package within the agreed timeline," IMF Managing Director Dominique Strauss-Kahn said.

(Reporting by Glenn Somerville, Editing by Kazunori Takada)

Stocks that performed well in 2010 were among Thursday's biggest gainers as investors sought to boost returns by the year's end. Advancing stocks outnumbered decliners by more than two to one on both the New York Stock Exchange and Nasdaq.

Package shipper FedEx Corp (FDX.N) raised its full-year outlook, though its quarterly profit and revenue missed expectations. Shares rose 2 percent to $94.22 while larger rival United Parcel Services (UPS.N) gained 2.1 percent to $73.76 and the Dow Jones Transportation Average .DJT gained 1.3 percent.

"The fact that FedEx missed its earnings is overshadowed by its very strong outlook, which is a good indicator that we're looking for good economic times ahead," said Kimberly Foss, president at the Sacramento, California-based Empyrion Wealth Management, which has more than $200 million in assets under management.

Visa Inc (V.N) and MasterCard Inc (MA.N) tumbled on heavy volume after the Federal Reserve issued a proposal that would force banks and card networks to slash the fees they charge retailers on debit cards. Visa sank 13 percent to $67.19 while MasterCard slumped 10 percent to $223.49.

The Dow Jones industrial average .DJI was up 41.78 points, or 0.36 percent, at 11,499.25. The Standard & Poor's 500 Index .SPX was up 7.64 points, or 0.62 percent, at 1,242.87. The Nasdaq Composite Index .IXIC was up 20.09 points, or 0.77 percent, at 2,637.31.

Stocks gained momentum after a slow start to the day, with big gainers for the year boosting the Nasdaq.

Intuit Inc (INTU.O), known for its tax-filing software, gained 3 percent to $49.35 after rising about 60 percent for the year.

Some shares raised hopes consumers will be less frugal over the holiday shopping season. Amazon.com Inc (AMZN.O) rose 1.4 percent to $178.10 and its stock was up 32 percent for the year.

After the closing bell, Oracle Corp (ORCL.O) reported a surge in new software sales in its second quarter, lifting its shares 3.2 percent to $31.24.

Starbucks Corp (SBUX.O) rose 2.3 percent to $32.59 after Goldman Sachs gave the coffee chain a "conviction buy" rating with a $44 price target.

Economic data added to the positive mood. Factory activity in the U.S. mid-Atlantic region unexpectedly rose in December, while jobless claims dipped for a second week. November housing starts rose, but permits for future home construction dropped to a 1-1/2 year low.

U.S.-listed shares of Research in Motion (RIM.TO)(RIMM.O) rose 1.8 percent to $60.28 after it reported its third-quarter results after the close.

"While we expect the market to continue growing, the slower growth we expect is going to be good for those companies that execute well, but challenging for the ones that have been struggling," said Alan Gayle, senior investment strategist at RidgeWorth Investments in Richmond, Virginia.

About 7.54 billion shares were traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq, well below the year's daily average of 8.62 billion.

(Reporting by Ryan Vlastelica; Editing by Kenneth Barry)