By Chikako Mogi
TOKYO (Reuters) - Asian shares rose on Friday, tracking global equities higher after upbeat U.S. labor market data, while the dollar eased slightly on currency markets that were otherwise watching for the strength of signals coming from a Bank of Japan policy review.
In the share markets, investors turned attention toward regional corporate earnings to assess the outlook for growth.
MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> was up 0.3 percent after reaching a six-week high earlier, and was set for a weekly gain of 2.4 percent for its best such showing in five months.
Hong Kong shares (.HSI) advanced 1 percent, with robust quarterly earnings spurring gains, while a sharp rise in gold prices helped underpin Australian shares (.AXJO) which rose 0.2 percent. Australian shares were also benefiting from their relatively high yields compared to other countries.
An inflow of capital due to offshore demand from Japanese institutions and insurance firms to Australia's high-yielding shares in telcommunications and banks has helped lift the market in recent sessions, said Tim Radford, global analyst at Sydney-based advisor Rivkin.
"Yield outside of Australia has been pushed quite low," he noted.
South Korean shares (.KS11) edged down 0.2 percent, however, as the market took a breather from the week's relief-rally after the country's top exporters posted better-than-expected results.
In Japan, the Nikkei stock average (.N225) fell 0.4 percent, after touching on Thursday its highest level since June 2008. Japanese markets will be closed on Monday for a holiday. (.T)
Although it is still early in the quarterly reporting season, only two out of the 16 Nikkei companies that have reported so far beat market expectations, data from Thomson Reuters StarMine showed.
Overnight U.S. S&P 500 (.INX) rose 0.4 percent, driven by stronger-than-expected earnings and the large drop in weekly jobless claims.
CENTRAL BANKS AT CENTRESTAGE
The Bank of Japan will likely project that it will meet its 2 percent inflation target in two years at a one-day meeting on Friday.
The BOJ on April 4 shocked financial markets by announcing a radical monetary expansion campaign aimed at ending stubborn deflation and reviving growth. The central bank's strong reflationary policy commitment has further weakened the yen and underpinned the dollar, lifting it close to the symbolic 100 yen mark earlier this month.
"It will be the progress of the plan, rather than the plan itself, which will be scrutinized and ultimately provide direction for the market. A positive take on the comments will support the current 'risk on' sentiment," said Tim Waterer, senior trader at CMC Markets in Sydney, in a note to clients.
"On the other hand, any ambiguity may lead to a cooling of the recent uptrend."
Recent weak U.S. data has slowed the dollar's progress. The dollar was down 0.4 percent at 98.79 yen.
The euro was up 0.2 percent at $1.3035, moving away from a three-week low of $1.2954.
Expectations of a rate cut by the European Central Bank at its meeting next week bolstered European shares but weighed on the euro.
The U.S. labor market report came ahead of the Federal Reserve's policy-making meeting next Tuesday and Wednesday, as well as a closely watched monthly payrolls report for April on May 3.
Market belief that global monetary stimulus will remain in place helped risk asset markets rebound from a sharp sell-off earlier this month, triggered by disappointing U.S. and Chinese manufacturing data which raised concerns about slowing momentum in the world's top two economies.
Spot gold rose 0.6 percent at $1,476.29 an ounce, recovering much of the loss it incurred in the massive sell-off two weeks ago. (GOL/)
"Markets are experiencing cross-asset differentiation following softer global activity data in April. This mainly reflects the repricing of slower Chinese growth and expectations of very easy monetary policy in G4," Barclays Capital said in a research.
"We continue to favor overweight positions in developed market equities but are less constructive on emerging markets equities."
U.S. crude was down 0.3 percent at $93.35 a barrel and Brent fell 0.4 percent to $103.01. (O/R)
(Additional reporting by Thuy Ong in Sydney and Somang Yang in Seoul; Editing by Shri Navaratnam and Simon Cameron-Moore)