GLOBAL MARKETS-Asian shares up, mood cautious before U.S. jobs data

Fri Mar 7, 2014 2:03am EST

* European shares seen likely to edge slightly down at open

* Euro firm in wake of ECB decision to stand pat

* Investors await U.S. jobs report; 149,000 increase expected

* Oil holds daily gains as Ukraine/Russia concerns persist

By Lisa Twaronite and Shinichi Saoshiro

TOKYO, March 7 (Reuters) - Asian stocks rose on Friday, buoyed by Wall Street's gains the previous day, but investors remained cautious ahead of the U.S. nonfarm payrolls report later in the session.

European shares were seen edging down at the open, but big moves were viewed as unlikely as investors awaited the U.S. jobs data.

Financial spreadbetters predicted Britain's FTSE 100 would open flat to 8 points lower, or down as much as 0.12 percent; Germany's DAX was seen falling 3 to 15 points, or as much as 0.16 percent; and France's CAC 40 was expected to open 1 to 4 points lower, or down as much as 0.09 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.3 percent, on track for a weekly gain of more than 1 percent. Tokyo's Nikkei stock average ended 0.9 percent higher at its highest closing level since Jan. 29, logging a 2.9 percent weekly gain.

In addition to the U.S. jobs figures, market participants warily watched developments in the Ukraine/Russia standoff.

Even as anxiety about an immediate conflict lessened compared to the start of the week, Crimea's parliament voted on Thursday to join Russia, and its Moscow-backed government set a referendum in 10 days.

"Fears of another flare-up in Ukraine and the associated carnage meted out last Monday may keep traders cautious going into the weekend and subsequently cap any gains," Jonathan Sudaria, a dealer at London Capital Group, said in a note to clients.

Friday's main focus was the U.S. nonfarm payrolls report, which was forecast to show an increase of around 149,000 in February, according to a Reuters survey of economists, up from the weather-depressed gains of 113,000 in January and 75,000 in December.

Market watchers said some expectations may have been lowered by the soft ADP private-sector jobs report, and by the ISM services sector survey released earlier this week.

"The market could treat the consensus figure of about 150,000 jobs as a positive surprise. Considering the severe winter conditions, a number through to 120,000 may not be considered a letdown," said Ayako Sera, senior market economist at Sumitomo Mitsui Trust in Tokyo.

The dollar fetched 102.96 yen, having broken above the 103 yen threshold on Thursday for the first time since late January. It pulled away from this week's low of 101.20 yen hit on Monday.

A solid U.S. nonfarm payrolls report would help the greenback consolidate its position above 103 yen but participants will be wary of pushing too hard as the crisis in Ukraine appears to be far from over, Sumitomo Mitsui Trust's Sera said.

The dollar index, which weighs the dollar against a basket of major currencies, was at 79.659, after skidding as low as 79.590, its lowest since late October, in wake of the euro's surge.

The euro remained near the previous session's highs following the European Central Bank's decision not to ease policy.

The ECB's decision on Thursday to stand pat pushed the euro to its highest level since late December. It was steady in Asia at $1.3860, after rising as high as $1.3873 on the EBS trading platform following the ECB's announcement.

The euro also remained firm against the Japanese currency, buying 142.71 yen after touching 142.99 yen earlier on Friday, its highest since Jan. 10.

In emerging currencies, China's yuan continued to recover from a drastic slide in the recent weeks as the central bank fixed its midpoint firmer.

China's money rates slid this week despite fears that the country may suffer its first public corporate bond default, with traders saying the government's behaviour implies it might be abandoning its earlier tightening policy.

On the commodity front, gold traded near a four-month peak, nearly steady on the day at $1,349.66 per ounce. It got a lift on Thursday when the ECB's decision dented the dollar and increased bullion's currency-hedge appeal.

In a reminder of the geopolitical risk from the Ukraine/Crimea crisis, U.S. crude oil futures added about 0.3 percent to $101.91 a barrel, as the market watched for any disruption of oil and gas supply from Russia to Europe.

Brent also rose about 0.3 percent to $108.47 a barrel. But both benchmarks were on track to end the week down, with Brent heading for a second straight weekly decline and the U.S. contract for its first drop in eight weeks.

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