* Risk appetite intact after upbeat U.S., China data
* Spreadbetters see mixed open for Europe
* Coup in Thailand a mild distraction for region
* Weekend elections in Ukraine, EU eyed
By Shinichi Saoshiro
TOKYO, May 23 Asian shares edged up to one-year
highs on Friday as investors welcomed signs of improving
momentum in the world's biggest economies, with Tokyo's Nikkei
poised to score its first weekly gain in nearly a month thanks
to a weaker yen.
Financial spreadbetters expected a mixed open for Europe,
however, due to caution ahead of weekend elections in the
Ukraine and European Union. Britain's FTSE was seen
opening flat, Germany's DAX up 0.1 percent and France's
CAC 0.1 percent lower.
"Despite modest gains in overnight markets, European traders
are showing some hesitation ahead of the Ukrainian and European
election results," said Jonathan Sudaria, a dealer at London
Asian equities rode the momentum set in motion the previous
session by surveys showing China's factory sector had its best
performance in five months in May and U.S. factory output growth
hitting its fastest pace since February 2011.
Separate data also showed U.S. home resales rose in April
and the supply of properties on the market hit its highest level
in nearly two years, promising signs for the housing
The confluence of positive data from the world's biggest
economies soothed investor nerves though uncertainty over
China's outlook is likely to keep markets on edge this year.
MSCI's broadest index of Asia-Pacific shares outside Japan
was up 0.1 percent at 487.70 after hitting a
one-year high of 488.42. Overall activity in regional markets
was capped ahead of an extended weekend in the United States
where markets will be closed for Memorial day on Monday.
Markets were only mildly distracted by news that Thailand's
military had seized power in a bloodless coup late on Thursday,
pitching the nation into a further period of uncertainty as the
long drawn out political crisis shows no signs of resolution.
"The coup in Thailand was not entirely unexpectedly - risk
had already been seen as higher following the imposition of
martial law," Credit Agricole said in a note to clients.
Thailand's army chief, General Prayuth Chan-ocha, who
declared martial law two days earlier, said the military had to
restore order and push through reforms after six months of
After the coup, the Thai baht weakened to a low of
32.70 per dollar in offshore trading on Thursday but has since
recovered slightly to a narrower 32.46-32.59 range on Friday.
Meanwhile, presidential elections in Ukraine on Sunday is
another potential development that could undermine investor risk
appetite. The United States and European Union hope the vote
will strengthen the embattled central government.
"If elections are not held in all parts of Ukraine, Russia
could further question the legitimacy of the process, and this
would increase geopolitical risk," said Masafumi Yamamoto,
market strategist at Praevidentia Strategy in Tokyo.
The Nikkei climbed 1 percent as the yen remained on
the back foot against the dollar. The Japanese index has gained
about 2.7 percent so far this week and poised for its first
weekly gain in three.
The dollar traded little changed at 101.77 yen, and
has gained about 0.2 percent on the week. Though the rise is
modest, it is still poised to snap a four-week losing run versus
the yen, helped as U.S debt yields bounced from multi-month lows
U.S. Treasury yields edged higher on Thursday after upbeat
U.S. existing home sales and factory activity lifted sentiment.
The euro eased slightly on the day to $1.3647. It was
within sight of a three-month low of $1.3634 set on Wednesday,
hurt by rising expectations the European Central Bank will ease
policy as early as next month.
Also keeping euro bulls at bay is some worry that the
European Union elections over the weekend could destabilise some
euro zone governments at home.
Nickel at the London Metal Exchange (LME) looked set to
pocket a 3.5 percent weekly gain, building on the year's stellar
advance after a shutdown of Indonesian supply, while copper
targeted a flat weekly close following its push to two-month
(Editing by Shri Navaratnam)