* Dollar hits 7-month high against yen, firms against euro
* Chinese, European, US manufacturing data lifts mood
* Major Wall Street indexes rise about 1 pct
By Walter Brandimarte and Kirsten Donovan
NEW YORK/LONDON, April 1 (Reuters) - The dollar hit a
seven-month high against the yen and global stocks rallied on
Thursday after positive manufacturing data from China, Europe
and the United States raised optimism about economic recovery.
Commodities and emerging market assets jumped while prices
for safe-haven Treasury bonds retreated as investors started
the second quarter with renewed appetite for higher-yielding
assets.
Investor sentiment got a boost from business surveys
showing factories across Europe, Asia and the United States
cranked up production in March. For details, see
[] and [].
The reports suggested the strong recovery in emerging
markets is taking root in the developed West.
They also raised hopes for Friday's key U.S. payrolls
report, which is expected to show the economy added 190,000
jobs last month -- an outcome that would likely boost
expectations for higher U.S. interest rates.
"We had a slew of nice upside surprises from manufacturing
data in China, Europe, the UK. So that's a good start to the
month," said Matthew Strauss, senior strategist at RBC Capital
Markets in Toronto.
"And if we get a good payrolls number tomorrow, that's a
dollar-positive," he added.
U.S. stocks added to gains after the Institute for Supply
Management said its index of national factory activity expanded
in March at its fastest pace in more than five years.
The Dow Jones industrial average <> rose 81.62 points,
or 0.75 percent, to 10,938.25, while the Standard & Poor's 500
Index <.SPX> was up 9.40 points, or 0.80 percent, at 1,178.83.
The Nasdaq Composite Index <> gained 16.63 points, or 0.69
percent, to 2,414.59.
In Europe, the FTSEurofirst 300 index of shares <>
was up 1 percent, and in Asia overnight Tokyo's Nikkei average
rose to its highest in a year and a half, buoyed by the fall in
the yen which makes it easier for Japanese exporters to sell
their goods abroad.
The MSCI All-Country World Index <.MIWD00000PUS> of global
stocks was up 1.43 percent, having posted the fourth
consecutive quarterly gain with a 2.7 percent rise in the first
three months of 2010.
The MSCI stock index for emerging markets <.MSCIEF> climbed
1.67 percent as the HSBC's China Purchasing Managers' Index
(PMI) showed first-quarter manufacturing output expanded at the
briskest clip in the survey's six-year history.
China's official purchasing managers index rose to 55.1 in
March from 52.0 in February, beating the median forecast of
54.5 in a Reuters poll of economists.
Manufacturing activity in the euro zone also grew last
month at its fastest pace in over three years, data showed.
YIELD APPETITE RISES
The U.S. dollar rose as high as 93.89 yen <JPY=>, its best
level since August 2009. It was last at 93.87 yen, up 0.4
percent on the day.
The weakening of the yen was also spurred by talk that
Japanese investors will look for higher returns abroad now that
the new fiscal year has started.
The euro slipped 0.07 percent to $1.3501 <EUR=>, as
Wednesday's quarter-end buying faded and analysts continued to
fret about a debt crisis in Greece.
Meanwhile, sterling hit a five-week high against the euro
of 88.51 pence, with traders citing an opinion poll showing the
opposition Conservatives could gain a majority in the upcoming
election, diminishing UK political uncertainty.
The pick-up in riskier assets put government bonds under
pressure. Benchmark 10-year Treasury prices <US10YT=RR> were
down 10/32, with the yield at 3.8724 percent.
The Chinese data also helped spur metals higher, with
copper <CMCU3> firming to a 20-month high as improving demand
sentiment combined with fund buying helped push prices up,
while Nickel hit a near two-year high at $25,320.
Oil, meanwhile, pushed to a fresh 18-month high, bolstered
by talk of fresh inflows from investors at the start of the new
quarter, with U.S. crude for May delivery <CLc1> up more than 1
percent to $84.66 a barrel.
(Additional reporting by Steven C. Johnson in New York,
Editing by Chizu Nomiyama)
