Most Asian stocks edged up on Thursday on a drop in oil prices from record levels, but gains were capped as investors looked to U.S. jobs data to gauge the strength of the world's biggest economy. The dollar was unchanged ahead of Friday's U.S. payrolls data and a Federal Reserve policy-setting meeting on interest rates on Tuesday. Oil prices eased from 21-year highs after data showed a jump in U.S. gasoline supplies and the head of OPEC reversed previous statements and said the group could immediately boost output to help cool prices. Gold edged up, while Japanese government bonds extended a rally to two-week highs. Tokyo's Nikkei share average <.N225> had risen 0.3 percent by midday to 11,037.57 after ending at a 10-week closing low on Wednesday. Nagging worries about the impact of high oil prices on corporate earnings weighed on the market. "People aren't convinced that oil prices will keep falling from this level.... In fact, if prices stay above $40 per barrel for a while, then many Japanese companies will have no choice but to slash their annual profit outlook," said Yasuo Yabe at Meiwa Securities.
"On top of oil worries, investors are also becoming cautious ahead of Friday's U.S. jobs data," he said. Mitsubishi Motors Corp. <7211.T> climbed 6.6 percent after it kept its full-year loss forecast intact on Wednesday even though a widely publicised recall scandal sent sales in the key U.S. and Japanese markets skidding further than anticipated. MSCI's broadest index of Asia Pacific shares outside Japan was flat at 0220 GMT. Singapore shares rose 1.1 percent <.STI> to 3-Ѕ year highs, lifted by a 1.4 percent jump in Singapore Telecommunications Ltd. after it reported a 16 percent jump in quarterly profit. Hong Kong's benchmark index <.HSI> edged up 0.7 percent, while South Korean shares <.KS11> rose 0.5 percent. Shares in Taiwan <.TWII> dropped 0.9 percent, weighed down by fall in technology counters.
OIL PRICES EASE
Oil stood around $42.83 a barrel after hitting 21-year highs of $44.34 on Wednesday. Crude prices eased after OPEC President Purnomo Yusgiantoro said the cartel could tap into its 1 million to 1.5 million barrels per day of spare production capacity immediately. His statement came a day after Purnomo said the group could not pump any more to cool prices. The dollar was around 111.10 yen , little changed from late U.S. levels and the euro was also flat around $1.2050. "Market players are reluctant to move ahead of U.S. employment data," said Tohru Sasaki, chief forex strategist at JPMorgan Chase Bank. "If the payrolls data comes just in line with expectations, the dollar is likely to weaken, especially in a few weeks' time, given doubts about U.S. growth." Jobs growth is seen as the linchpin of the U.S. expansion and financial markets will pay close attention to Friday's July employment report, which is forecast to show the economy created 228,000 new jobs after a disappointing 112,000 in June. In U.S. equities, the Dow Jones industrial average <.DJI> edged up 0.06 percent, while the tech-heavy Nasdaq <.IXIC> fell 0.23 percent. Japanese government bond prices rose, pushing the yield on the benchmark 262nd 10-year cash bond <0#JPTSY=JBTC> down two basis points to 1.765 percent. It had dropped as far as 1.760 percent -- its lowest since July 20. Spot gold was at $392.00 an ounce, against $391.70 in New York.///