TOKYO (Reuters) - Overnight gains in U.S. stocks underpinned Asian shares on Friday, but prices were capped ahead of key U.S. jobs and Chinese trade figures due later in the session, while the dollar hovered near a 3-1/2-year high against the yen.
Global equity markets rose on Thursday after another piece of U.S. data indicated a steady improvement in the world's largest economy, raising hopes the government's monthly nonfarm payrolls report will be solid. The U.S. economy is expected to have added 160,000 jobs in February.
Friday's payrolls report is key to gauging the U.S. Federal Reserve's policy course as the Fed will keep its near-zero rate stance until the unemployment rate falls to 6.5 percent, as long as inflation does not threaten to top 2.5 percent.
Ahead of the nonfarm payrolls, Thursday's report showed the number of Americans filing new jobless claims benefits fell unexpectedly last week.
"The U.S. nonfarm payrolls report will be the biggest event risk over the next 24-hours of trading and the data may increase the appeal of the dollar as job growth is expected to pick up in February," said David Song, currency analyst at DailyFX.
The recent string of positive U.S. economic data drove U.S. stocks higher, pushing the Dow Jones industrial average <.DJI> to an intraday record for a third consecutive session on Thursday and boosting the dollar against the yen to a 3-1/2-year high of 95.100 on Thursday. The dollar was at 94.90 yen early on Friday.
The MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was nearly flat. Australian shares <.AXJO> pared earlier gains to trade virtually unchanged while New Zealand shares <.NZ50> earlier hit a record high.
South Korean stocks <.KS11> opened down 0.1 percent.
Japan's Nikkei stock average <.N225> opened up 0.8 percent, hitting its highest since September 2008. <.T>
The yen has come under renewed selling pressure as the dollar is increasingly bought on signs of a strengthening U.S. economy while expectations remain firmly in place for the Bank of Japan to take bold reflationary measures when a new leadership takes over later this month.
The yen fell sharply against the euro on Thursday to a low of 124.57.
After keeping interest rates steady as expected at its meeting on Thursday, European Central Bank President Mario Draghi suggested the bank was not in a hurry to act while noting that any threat of contagion to other euro zone members from Italy's inconclusive election results was muted.
The euro rallied more than 1 percent against the dollar on Thursday after Draghi's comments, and has kept the gains early on Friday, trading at $1.3108.
U.S. Treasuries prices fell for a fourth consecutive session on Thursday, lifting the benchmark U.S. 10-year Treasury yield as high as 1.997 percent.
Investors will be watching trade data from China, the world's second-largest economy and top consumer of many commodities.
"A huge seasonal impact in February should ensure a very misleading headline on China's exports. Risks seem firmly tilted to a clear negative reading on exports which should inflict at least passing damage on AUD, NZD and Asian currencies." said Sean Callow, a senior currency strategist at Westpac.
U.S. crude was down 0.1 percent at $91.45 a barrel.
(Additional reporting by Ian Chua in Sydney; Editing by Eric Meijer)
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