* MSCI Asia Pacific ex-Japan rises 1.1 percent
* ECB policy decision due later, U.S. jobs data on Friday
* Worries about turmoil in Portugal weighs on sentiment
* U.S. July 4 holiday seen keeping markets subdued
By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY, July 4 Asian stocks clawed
higher on Thursday but gains were tempered by concerns about
political turmoil in Portugal and investor caution ahead of key
events including Friday's U.S. jobs data.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 1.1 percent, recouping a portion of
Wednesday's slide of more than 2.4 percent.
Regional shares were broadly higher, with Hong Kong equities
rising 1.9 percent after sliding 2.5 percent the previous
day, while Shanghai stocks rose about 1 percent.
Japan's benchmark Nikkei average underperformed,
however, easing by 0.2 percent.
"Volume is likely to stay low because of fewer participants
as the U.S. markets will be closed later today," said Hiroichi
Nishi, an assistant general manager at SMBC Nikko Securities.
"Investors are focused on Friday's U.S. jobs data, so they
won't take large positions today."
Investors are focusing on the U.S. nonfarm payrolls data for
fresh clues on when the Federal Reserve will start scaling back
its $85-billion-per-month bond buying programme.
Growing speculation that the Fed might start tapering its
monetary stimulus later this year had helped weigh on Asian
equities last quarter, with the MSCI Asia-Pacific ex-Japan index
sliding nearly 8.6 percent in the April-June period.
"If anything, a relatively ordinary number would probably be
more positive. The market could take a hit if the numbers are
too strong," said Satoshi Okagawa, senior global markets analyst
for Sumitomo Mitsui Banking Corporation in Singapore, referring
to the jobs data and the potential impact on Asian equities.
A political crisis in Portugal was another reason for
caution. The Portuguese government is struggling to survive
following the resignations of its foreign minister and finance
minister this week, which could deprive it of a majority in
Portugal's stock market dropped more than 5 percent
on Wednesday, suffering its biggest fall in around three years,
while government bond yields briefly jumped above 8
percent for the first time since November.
Ructions in financial markets there threatened to spill over
to neighbouring countries and raise borrowing costs.
That risk saw the euro fall as much as 1.5 percent against
the yen at one stage to 128.66 on Wednesday. It has since
recovered to 129.80.
Against the dollar, the common currency stood at $1.2994
down 0.1 percent but above a five-week low of $1.2923 set
The erratic moves overnight were due in part to the
reluctance of investors to hold large bearish positions going
into Thursday's ECB meeting.
While the ECB is expected to leave interest rates unchanged,
it is likely to try to reassure investors rattled by new
political stress in Europe and the U.S. Federal Reserve's plans
to begin winding up its stimulus.
U.S. crude edged up 0.1 percent to $101.34 a barrel,
not very far from a 14-month high of $102.18 set on Wednesday.
Oil prices had pushed higher on Wednesday as the market
remained wary of the unrest in Egypt that threatens to further
destabilise the Middle East region, which pumps a third of the
Unrest in Egypt came to a head on Wednesday, when the
country's armed forces removed President Mohamed Mursi to force
a resolution to the political crisis, paving the way for an
Renewed geopolitical tensions triggered safe-haven buying
that helped underpin bullion. Spot gold edged up 0.4
percent to $1,255.81 an ounce.