Thursday 05:00 GMT. Japanese stocks hit an eight-month high but the rest of Asia was generally flat despite strong US private-sector jobs data that came out overnight.
The MSCI Asia Pacific Index added 0.5%, the Nikkei 225 average was up 1.2%, Australia's S&P/ASX 200 was off 0.1%, and South Korea's Kospi Composite was down 0.2%. Hong Kong's Hang Sang index was up 0.2%, Taiwan's Taiex index advanced 0.1%, and the Shanghai Composite index was lower by 0.2%.
In Tokyo, the weaker yen boosted exporters' outlook. Fanuc was up 2.6%, Kyocera was up 2.7%, and TDK gained 2.9%. JVC Kenwood surged 26% after officially announcing a capital increase plan, clearing uncertainty about share dilution.
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In Shanghai, coal miners were lower on profit-taking. China Coal shed 1.1% after rising 6.4% in the previous four sessions,while China Shenhua Energy was off 1.2% after gaining 4.5% in recent days.
In Sydney, trading was subdued amid lingering uncertainty over the impact of the floods in the state of Queensland. BHP Billiton was off 0.5% and Rio Tinto was 0.1% lower while Fortescue Metals rose 1.7%. Insurance Australia Group rose 1.3% on bargain-hunting after recent falls that were prompted by flood-related concerns.
In Seoul, investors took a breather after the main index hit a record high earlier this week. Banking shares lost ground after several major banks said they were reviewing plans to take over troubled savings banks. KB Financial Group slid 3.6% and Woori Financial Group fell 3.5%. Hana Financial Group lost 4.2%. But shipbuilders extended gains on hopes for new orders. Hyundai Heavy Industries was up 2.8%, Samsung Heavy Industries rose 2.4% and Daewoo Shipbuilding gained 1.0%.
In Taipei, Yuanta Financial jumped 3.5% after the company said it would sell its stake in Singapore brokerage firm Kim Eng to Malaysia's Maybank.
Elsewhere in the region, Malaysian shares were off 0.2%, Singapore's Straits Times index was up 0.4%, New Zealand's NZX-50 edged up 0.1%, Indonesia's share market was off 0.7%, Thailand shares added 0.2% while India's ensex gained 0.2%.
US A big jump in US private sector employment during December has given the dollar a boost and pulled stocks off their session lows, as traders welcome further evidence that the world's biggest economy is picking up steam.
Like a new year resolutionist struggling with unrealistic goals, stocks and commodities had earlier been suffering a confidence wobble as a batch of mixed European service sector data encouraged further profit-taking.
The FTSE All-World equity index is down 0.3%, pulling back from Tuesday's 27-month high. An auction of Portuguese debt required sharply higher yields, displaying the market's lingering distrust of eurozone paper, which was supported by the latest purchasing managers service sector surveys showing the periphery still struggling.
Those fears also led to a stronger dollar as the euro was sold-off. A stronger dollar typically accompanies declines in US stocks, on the theory that exports will decline, and in commodities, given that oil is priced in dollars.
But instead an ADP Employer Services report showing 297,000 jobs added last month - compared with forecasts of 100,000 - has lead to a resurgence of growth hopes for the US, especially with a non-farm payroll report coming on Friday.
The S&P 500 index rose 0.5%, to its highest since early September 2008, before the fall of Lehman Brothers, and US crude oil is back above the USD 90-a-barrel level that it has struggled to maintain.
The shrugging off of currency effects for stocks and oil is significant. With Tuesday's assurance by the US Federal Reserve that it will not curtail its USD 600bn quantitative easing programme despite improved economic data, investors know that government stimulus will stay at their back, even if currency and interest rate moves - US 10-year Treasury yields are up 13 basis points - go against the Fed.
Instead, investors are turning to focus on fundamentals. For oil, that means demand, and the US Department of Energy on Wednesday said crude stocks fell more than expected in the week ending December 31, despite snowstorms shutting down several US cities. Oil is back above USD 90 a barrel.
Stocks are also gearing up for an earnings season that could be boosted by the myriad improvements in US economic indicators at the end of 2010, from jobs to manufacturing activity, further boosted by a jump in the Institute of Supply Management's services sector index.
Commodities - Gold and precious metals declined as investors' fears of inflationary growth from stimulus accompanied by continuing economic weakness, declined a bit. Gold, which fell more than 2% on Tuesday, fell 0.5% on Wednesday, to USD 1,373 an ounce.
Meanwhile, oil fought early weakness to rise 1.2%, to USD 90.46, following the bullish inventory data and ADP report. The tight band linking a rising dollar to falling commodity prices may be shifting, as investors put aside their eurozone fears to focus on stronger US growth.
"If global risk appetite remains intact but market sentiment towards Euroland continues to sour, then 'risk' would likely be supportive for commodities while negative for the single currency," said analysts at Danske Bank. They said that "the possibility of dollar decoupling" would be a major risk for hedgers.
Forex - The yen continues to slip from Y83.25 in late New York trade to Y83.30 per dollar on Thursday. It was at Y109.37 against the euro, from Y109.47. The Japanese currency has been falling since an earlier claim from Toyota that the cross should be a minimum Y90 if Japanese jobs are not to be cut by struggling exporters, alerting investors to possible Bank of Japan intervention. The Swiss franc, another "haven" currency, is down 1.8% to SFr0.9659 versus the US dollar.
The euro is down 1.1% versus the dollar at USD 1.3160 following the service sector surveys for the region and the Portuguese auction.
Rates - Eurozone peripheral debt is fairly quiet but with an upside bias for yields as fiscal concerns linger. However, Spanish 10-year yields are down 2 basis points to 5.30% after more supportive comments on the attraction of Madrid's debt from China.
Yields on benchmark 10-year US Treasuries have reversed early declines and are up 13 basis points to 3.45% as traders price in better economic growth prospects and a possible reduction in Fed buying.
Europe - Bourses are mixed as further weakness in industrial commodities hurt resource stocks. The ADP data have pulled most indices off lows. The FTSE Eurofirst 300 is flat, while London's FTSE 100 rose 0.5%, helped by a strong showing in the recently hard hit banking sector.
