GLOBAL MARKETS-Asian shares up on Yellen, China trade data, Ukraine

Thu May 8, 2014 2:13am EDT

* Yellen says considerable slack in U.S. labour market

* Putin calls for pro-Moscow separatists to postpone secession vote

* China exports and imports beat forecast, pointing to economic stabilisation

* ECB and BoE in focus; euro and sterling near recent peaks

By Hideyuki Sano

TOKYO, May 8 (Reuters) - Asian shares got a lift on Thursday from dovish comments by the U.S. Federal Reserve chief and upbeat Chinese trade data that suggested some signs of stabilisation in the world's second-largest economy.

Risk assets were also underpinned by signs of easing tensions in Ukraine after Russian President Vladimir Putin called on pro-Moscow separatists to postpone a secession vote.

Tokyo's Nikkei share average rose 0.9 percent while MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, inching away from five-week lows hit on Wednesday.

European shares are also expected to rise, with Germany's DAX seen edging up to 0.4 percent and France's CAC as much as 0.3 percent.

Fed chief Janet Yellen repeated her stance that the economy was still in need of lots of support given the "considerable slack" in the labour market.

"Yellen ... put her emphasis on the ways in which the economy and labour market were still falling short of the FOMC's goals. She also emphasised risks to the economy from a potential continuation of the recent 'flattening out' of housing activity," said Barclays analysts in notes to clients.

"The clear implication is that accommodative policy will be needed for a long time."

The Dow Jones industrial average rose 0.7 percent and the S&P 500 gained 0.6 percent.

Yellen's remarks also kept the 10-year U.S. Treasuries yield at 2.590 percent, near Monday's three-month low of 2.572 percent.

China's exports and imports returned to slight growth in April after a surprise fall last month, supporting the case that Beijing's use of targeted policy measures to underpin growth may be starting to stabilise the economy.

Mainland Chinese shares rose 0.8 percent also helped by bets on further stimulus measures after the central bank warned of a deepening economic slowdown.

Adding to the improved mood, Putin called on pro-Moscow separatists in Ukraine to postpone a vote on secession just five days before it was to be held.

In what could be a breakthrough in the worst crisis between East and West since the Cold War, Putin also announced he was pulling Russian troops back from the Ukrainian border, although the West said they saw no sign of such a move yet.

Emerging markets also held generally firm but in Asia, Thai shares extended gains on rising political uncertainty while Vietnamese shares fell the most in nearly 13 years after Vietnam said a Chinese vessel intentionally rammed two of its ships in a part of the disputed South China Sea.

The euro traded flat at $1.3917, not far from Tuesday's two-month high of $1.3952, ahead of the European Central Bank's policy meeting later in the day. A majority of investors are expecting no policy change.

A Reuters poll of more than 60 foreign exchange strategists showed on Wednesday that they think the euro needs to reach $1.42 before the ECB takes any action to weaken the currency. Still, the vast majority believe that such action is unlikely to happen.

The British pound held near a five-year high against the dollar on rising expectations the Bank of England could tighten its policy before the Fed, probably early next year. It last stood at $1.6959 versus Tuesday's high of $1.6997.

With risk sentiment improving slightly, the yen stepped back from a three-week high of 101.43 yen to the dollar set on Wednesday, and traded at 101.77 yen.

Gold licked its wounds at $1,290.30 per ounce after dropping 1.4 percent the previous day.

The Australian dollar climbed 0.5 percent to $0.9352 after local data showed that employment had risen more than expected in April. (Editing by Chris Gallagher and Jacqueline Wong)