* New U.S. jobless claims near six-year low in latest week
* Improving U.S. job market revives Fed tapering
* Confusing communication leaves investors lost on Fed
* Euro hurt by political worries in Rome, sterling up on
* Impasse in Washington talks hangs over market gains
By Hideyuki Sano
TOKYO, Sept 27 Most Asian stock markets posted
modest gains up on Friday after U.S. jobless claims data pointed
to an improving labour market, but the lack of progress in
budget and debt negotiations in Washington kept investors on
The solid jobs data revived expectations of a reduction in
U.S. monetary stimulus after the Federal Reserve's surprise
decision not to do so last week and conflicting messages from
various top Fed officials since then.
European shares also were expected to gain slightly, with
Germany's DAX, Britain's FTSE and France's Cac
40 all seen up about 0.1 percent. U.S. stock futures
were marginally weaker.
MSCI's broadest index of Asia-Pacific shares outside Japan
gained 0.2 percent, with Australian shares
scaling a five-year high, in sympathy with Wall Street shares,
which broke a five-day losing streak on Thursday.
Japan's Nikkei bucked the trend, falling 0.4 percent
as the market turned its focus to the government's growth
strategy and tax plans next week.
"Though U.S. jobless claims data is positive enough to
marginally lift the market, investors need further evidence of a
U.S. economic recovery as well as a (political) settlement in
Washington," said Hanyang Securities analyst Lim Dong-rak.
U.S. weekly initial claims for unemployment benefits dropped
5,000 last week despite economists' expectations of a rise.
The claims data's four-week moving average, a key gauge that
smoothes out weekly volatility, dropped to 308,000, the lowest
level since June 2007.
That fall could add to the case that the Fed is safe to go
ahead with winding down its bond buying programme later this
year. Yet, investors are now cautious not to jump to
"The communication between markets and the Fed has broken
down since last week. And different Fed officials are saying
different things these days, and nobody knows exactly why the
Fed did not taper this month after all," said Tohru Yamamoto,
chief fixed income strategist at Daiwa Securities.
Indeed, four top Fed officials acknowledged on Thursday the
Fed confused markets but they hardly agree on what to do next,
with both hawks and doves making their own cases, doing little
to ease investors' confusion.
Traders also see an impasse in U.S. congressional
negotiations over the budget and increasing the federal
borrowing limit as likely to cap gains in global shares in the
next few weeks.
Republican lawmakers in the House of Representatives refused
to give in to President Barack Obama's demands for
straight-forward bills to keep the government running beyond
Sept. 30, raising the chance of a government shutdown.
While investors see limited economic impact from a short
shutdown, that does not bode well for negotiations on the more
important issue of raising the debt ceiling.
Failure to act on the ceiling by Oct. 17, when the Treasury
will have run out of money, could lead to an unprecedented U.S.
sovereign debt default.
The cost of protection against U.S. sovereign default in the
credit default swap market has risen to its highest level in
In the currency market, the euro came under pressure amid
renewed concerns Italy's fractious coalition government could
Italian centre-right deputies supporting former Prime
Minister Silvio Berlusconi renewed threats to resign if their
leader is expelled from Parliament following a tax fraud
The euro traded at $1.3480, off a seven-month high of
$1.3569 hit last week.
The yen regained some of its lost ground after Japanese
Finance Minister Taro Aso said that he is not thinking of
lowering the effective corporate tax rate right now, contrary to
a media report on Thursday that the government is considering
taking such a step. The dollar eased 0.4 percent to 98.65 yen
The British pound gained 0.4 percent to $1.6092
after Bank of England Governor Mark Carney was quoted by the
Yorkshire Post as saying he sees no need for more bond-buying by
the central bank given the signs of recovery in the British
Oil prices were soft as fears of an escalation in military
conflict in the Middle East eased as the United States and
Russia agreed on a draft resolution that would demand Syria give
up its chemical arms and Washington and Tehran held the
highest-level dialogue since the Islamic revolution in Iran more
than three decades ago.
U.S. crude futures dropped 0.5 percent to $102.53 per