(Adds calls for European open)
* U.S. employment seen rising at fastest clip in 5 months
* Fresh violence in Ukraine eyed for signs of escalation
* Spreadbetters see mixed European open
* Sterling hovers near 5-year peak after robust UK data
By Shinichi Saoshiro
TOKYO, May 2 Asian shares edged up amid
expectations for an upbeat U.S. payrolls report later in the
session, while the markets kept an eye on the Ukraine after
reports of fresh violence there that could potentially dampen
Pro-Russian separatists in Slaviansk in eastern Ukraine said
on Friday Ukrainian forces had launched a "large-scale
operation" to retake the town.
Asian markets showed little immediate reaction to the
reports, but they could have greater implications for European
markets opening later in the session.
European shares were expected to open mixed, with
spreadbetters predicting Britain's FTSE 100 to open 0.1
percent lower, Germany's DAX to rise 0.2 percent and
France's CAC 40 to fall 0.15 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan
was up 0.4 percent. China's markets are closed
"The markets are concerned about what is going on in
Ukraine. But at the moment, few think this will develop into a
major geopolitical clash. Because both Russia and the U.S. don't
want to be seen as weak confrontation will continue, but likely
in the form of psychological warfare," said Kyoya Okazawa, head
of global equities and commodity derivatives at BNP Paribas in
On the macroeconomic front, market focus is squarely on
whether the U.S. April jobs report, which a Reuters survey of
economists forecast to show employment rising at its fastest
rate in five months, would be strong enough to decisively tilt
sentiment towards the U.S. economy.
U.S. economic indicators have been a mixed batch so far this
week, with first quarter GDP and construction spending falling
short of expectations while consumer spending recorded its
largest gain in more than 4-1/2 years in March and factory
activity accelerated last month.
U.S. Treasuries rallied on Thursday, focusing more on
weaker data that helped build expectations the Fed would be kept
from raising short-term rates before second-half 2015 and
perhaps even lead it to pause stimulus tapering.
The 10-year U.S. Treasury note yield fell to a two-month low
on Thursday, removing support for the dollar.
"After the weak GDP print, a strong non-farm payroll is
unlikely to alter Fed rhetoric - therefore risk (equities and
emerging markets) should rally, specifically in countries tied
to the United States via trade," currency strategists at CitiFX
wrote in a note to clients.
Tokyo's Nikkei stock average bucked the trend,
slipping 0.3 percent amid profit-taking before a succession of
holidays. The Tokyo markets will be closed on Monday and Tuesday
for public holidays.
Concerns about slowing growth has depressed the Nikkei this
year, which has underperformed many major markets after a
record-breaking rally of over 50 percent in 2013 thanks to
Tokyo's aggressive stimulus policies.
Dwindling expectations of fresh stimulus by the Bank of
Japan have also weighed on sentiment, as Governor Haruhiko
Kuroda has repeatedly insisted in recent weeks that the economy
can weather the impact of the sales tax hike that took effect
"The BOJ's easing looks so distant now. I would think it's
unlikely to take place this year," said Norihiro Fujito, senior
investment strategist at Mitsubishi UFJ Morgan Stanley
Securities in Tokyo.
The dollar stood little changed at 102.37 yen after
posting a modest gain against the Japanese currency on Thursday.
The euro was also flat, trading at $1.3863.
Sterling was at $1.6885, hovering near a five-year
high of $1.6921 hit on Thursday after robust manufacturing data
bolstered optimism in the British economy.
In the commodities markets, oil remained top-heavy after
slipping Thursday on disappointing Chinese manufacturing
activity and data showing U.S. crude stocks rose last week to
their highest level since 1982.
U.S. crude futures stood little changed at $99.42 a
London copper dipped and was on track to log its biggest
weekly loss in seven weeks, weighed by the Fed's decision this
week to continue tapering of its stimulus, which had provided
the commodity markets with liquidity.
Three-month copper on the London Metal Exchange
edged down 0.3 percent to $6,627.00 a tonne. Copper prices have
dropped about 1.9 percent this week.
(Additional reporting by Hideyuki Sano in Tokyo; Editing by