* Diplomatic efforts to solve Ukraine crisis underpin risk
* Ex-Japan Asia MSCI hits 2-month high
* Euro pressured on speculation ECB could adopt stimulus
* Soft U.S. data hardly changes optimism on U.S. economy
* Major European bourses seen rising 0.2 pct
By Hideyuki Sano
TOKYO, March 6 Asian shares hit a nine-week high
on Thursday as diplomatic efforts moderated the Ukraine crisis,
while the euro came under pressure as investors speculated
whether the European Central Bank will ease policy later in the
Any steps the ECB takes to support the still-fragile euro
zone economy are likely to boost risk assets, though gains could
be limited ahead of pivotal U.S. payrolls data on Friday.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 0.6 percent, with Taiwanese shares at 2
1/2-year high and Indian shares coming close to
a record peak hit in December.
European shares look set to spring higher, with Germany's
DAX, Britain's FTSE and France's CAC all
seen rising 0.2 percent at open.
Wall Street shares finished little changed on Wednesday,
with the Standard & Poor's 500 index closing just a
hair's breadth below its record closing high set on Tuesday.
"The Ukraine crisis is not over yet so the markets will keep
an eye on it. But as long as there is no armed conflict, it will
be gradually coming off the radar," said a chief currency trader
at a Japanese trading firm.
Although diplomatic efforts between Moscow and Washington
over Ukraine have made little obvious headway so far, U.S.
Secretary of State John Kerry said discussions would continue in
That assurance was enough to mollify investors' immediate
fears of military confrontation, directing their attention
instead to what steps the ECB might take to support the economy
and ward off deflation.
The euro traded at $1.3726, little-changed in early
Asia but off two-month high of $1.38255 hit on Friday.
On Wednesday, International Monetary Fund officials called
on the ECB to start buying public and private assets or extend
more cheap long-term loans to banks, as well as cutting interest
rates to a new record low.
Yet the ECB may hesitate to buy government bonds, unlike
other major central banks such as the U.S. Federal Reserve and
the Bank of Japan that have done so, in part for fear such a
step could infringe its ban on financing governments directly.
The ECB might explore other policy options, such as cutting
rates or stopping "sterilisation" operations that soak up the
money it spent buying the bonds of Greece and other countries at
the height of the euro zone sovereign debt crisis.
"The chances the ECB will not do any of the steps floated in
markets are pretty small. The actual economic impact of ending
sterilisation will be small, but the markets will take it as
opening the way for further easing in the future," said Arihiro
Nagata, head of foreign bond trading at Sumitomo Mitsui Bank.
With the euro in retreat, the dollar index kept some
distance from a two-month low hit last week, and was last at
80.169, versus Friday's low of 79.688.
Against the yen, the dollar rose to as high as 102.77 yen
, near its highest level in almost two weeks, reflecting
abating concerns over Ukraine.
Likewise, U.S. 10-year bond prices fell back and yields
lifted to 2.71 percent, off a one-month low below
2.60 percent hit on Monday,
The yield rose despite soft U.S. data that nicked optimism
over Friday's U.S. non-farm payrolls.
A report from payrolls processor ADP showed private
employment increased by a tepid 139,000 jobs last month, with
jobs growth in January also revised down sharply to 127,000 from
A separate private-industry gauge of U.S. service sector
activity also fell to its weakest level in four years in
February, with its employment sub-index contracting for the
first time since December 2011.
Still, the data did little to change investor perceptions
that recent weakness largely reflected bad weather in the past
Reduced fears over Ukraine led U.S. crude futures
near a two-week low of $100.85.