SINGAPORE, Oct 10 - Surprisingly strong U.S. jobs data earned the battered dollar a reprieve on Friday and sparked a broad rally in Asian stocks. The unexpected fall in weekly jobless claims soothed worries over the U.S. economy, lifting the dollar off its lowest levels in three years versus the yen and almost four months against the euro. Asian stocks followed the lead of Wall Street, where stock indices rose to multi-month highs, to climb more than two percent in Tokyo and nudge an index for the rest of the region to a three-year high. "In terms of broad dollar selling, the market's momentum has abated somewhat after the jobless claims numbers," said Toru Umemoto, a currency strategist at Morgan Stanley in Tokyo. "But in terms of yen-buying, we've got Bush coming to Japan next Friday and there will be all kinds of speculation keeping the market nervous. Capital flows are also still pointing to a higher yen."
President George W. Bush's visit to Tokyo next week has traders thinking it will be difficult for Japanese authorities to intervene aggressively to weaken the yen. At 0200 GMT, the dollar stood at 109.22 yen , up a quarter yen from Thursday's late New York levels and almost half a yen above three-year lows around 108.80. The euro hovered at $1.1717, down from $1.1740 late in New York and near-four-month highs around $1.1860 set on Thursday. Gold rose to $370.75 an ounce from $368.60 at the U.S. close. U.S. oil was 0.2 percent weaker at $30.95 a barrel.
EXPORTERS, PROPERTY STOCKS UP IN TOKYO
Japan's Nikkei stock average <.N225> ended morning trade up 2.5 percent at 10,799.20, with the weakening of the yen easing fears over exporters' profits. Chip and computer conglomerate NEC Corp <6701.T> firmed 3.6 percent, while Matsushita Electric Industrial Co Ltd <6752.T>, the world's second-largest consumer electronics maker, was up 3.0 percent. Auto makers also posted solid gains, with second-ranked Honda Motor Co Ltd <7267.T> up 3.2 percent. "Exporters have fallen a good deal because of the yen, so we are seeing a lot of short-covering action and a technical rebound today," said Norihiro Fujito, senior investment strategist at Mitsubishi Securities. "But intervention in the run-up to Bush's upcoming visit to Japan is going to be difficult...and it looks like the trend will still be for the dollar weakening to continue." Property stocks were also snapped up on news of a dip in Tokyo office vacancy rates, with Mitsui Fudosan Co <8801.T> jumping 5.9 percent. MSCI's broadest dollar-based index of shares elsewhere in the Asia Pacific <.MSCIAPJ> rose for the ninth session running, climbing 0.4 percent to its highest level since September 2000. Pacing the rise for a third day was the Malaysian market, where the benchmark index <.KLSE> was up 1.4 percent following an upgrade in the country's credit rating this week. Benchmarks elsewhere were up one percent in Hong Kong <.HSI> and South Korea <.KS11>, 0.8 percent in Taiwan <.TWII> and 0.7 percent in Singapore <.STI>. Australian stocks <.AXJO> advanced 0.3 percent, with life insurer AMP up 3.8 percent after British and Australian regulators approved its proposal to spin off its struggling British life operations and list them in London. U.S. stocks rose on Thursday as the jobs news and improved earnings from Internet media company Yahoo Inc helped drive the tech-laden Nasdaq index to its highest close in 19 months. The blue-chip Dow closed at a 16-month high. The government reported the number of Americans lining up for first-time unemployment benefits fell to its lowest level in eight months.//