* US manufacturing, jobless claims data lifts optimism
* Confirmation of easy monetary policy from Europe, Fed
* U.S. 10-year yield near 2-year peak hit in July
* US dollar firm, Aussie hits 3-yr low
By Hideyuki Sano
TOKYO, Aug 2 Asian shares advanced on Friday
after brisk U.S. factory activity data and a commitment to easy
monetary policy by European central banks and the Federal
Reserve buoyed Wall Street to record highs overnight.
Stirred by optimism on the U.S. economic recovery, the
benchmark U.S. Treasuries edged closer to a two-year high and
triggered a sharp rebound in the dollar from a six-week low hit
against a basket of currencies on Wednesday.
A strong reading in the upcoming U.S. payrolls data, due at
1230 GMT, is likely to stoke further momentum in markets,
possibly pushing the 10-year U.S. yield to new two-year highs.
"Essentially, the market is waiting for a global economic
recovery in the latter half of this year," said Tohru Yamamoto,
chief fixed income strategist at Daiwa Securities.
"We had a decent Chinese manufacturing data yesterday.
Periphery European countries are also improving recently. And
central banks have confirmed that easy policy will be in place.
These are the reasons why a rise in bond yields are not
destabilising share prices today unlike in June," he added.
The European Central Bank and the Bank of England both ended
policy meetings by leaving interest rates at record lows on
Thursday, a day after the Fed said the U.S. economy still needed
its support and avoided any mention of a change to its stimulus
The Nikkei share average rose 1.4 percent while
ex-Japan Asian shares gained 0.4 percent.
Shares in South Korea and Hong Kong hit
two-month peaks while Australian stocks rose to a 2
On Thursday, the Dow Jones index rose 0.8 percent and
S&P 500 gained 1.3 percent to end above 1,700 for the
first time ever.
The dollar index held onto Thursday's gains of 1.1 percent,
its biggest one-day rally in a month, to stand at 82.318,
extending its rebound from six-week low of 81.407 hit on
The broad rally in the dollar saw the euro ease to $1.3192
, flat on the day but off Wednesday's six-week high of
$1.3345, while the yen fell towards 100 per dollar, well
off this week's high around 97.58.
The Australian dollar hit a three-year low as the currency
was also smarting from dovish comments by the Reserve Bank of
Australia (RBA) on Tuesday.
That prompted markets to not only price in a cut in
interest rates next week, but a second easing before year-end,
shrinking the yield premium offered by Australian over U.S. debt
to its lowest since 2008.
On Thursday, U.S. data underlined the markets' optimism
about the recovery in the world's largest economy. The
Institute for Supply Management index of U.S. national factory
activity for July rose to its highest level since June 2011,
easing concerns a slowdown in emerging economies may take a toll
on U.S. growth.
A separate report also showed first-time applications for
jobless benefits hit a 5-1/2-year low last week, boding well for
the payroll data.
A monthly rise in hiring in the 200,000 area, analysts say,
should keep the Fed on track to start to pare its $85 billion
purchases in Treasuries and mortgage-backed securities, as early
as at its September 17-18 meeting.
"The market has digested the idea that the U.S. tapering
will occur at some point," said Andrew Doherty, head of equities
at Morningstar, an independent research house based in Sydney.
"There's been a reappraisal and revaluation that has seen
moves back into high-yielding stocks providing decent returns
Expectations of a gradual reduction in the Fed's bond buying
drove the 10-year U.S. Treasuries yield to 2.712 percent
, within sight of a two-year peak of 2.755 percent
hit last month.
U.S. crude oil futures prices were headed for their
biggest weekly gain in a month, having risen three percent this
week on upbeat global economic data and supply disruptions in
Africa and Iraq. It last traded up 0.6 percent at $108.64 per