* Asia stocks rise 2 pct on Wall St rise, earnings optimism
* Aussie employment figures soar past forecasts
* Euro climbs to 2-month high, Aussie gains
* Nikkei marks biggest percent gain in over a month
* European shares set to extend rally, eyes on BOE
By Elaine Lies
TOKYO, July 8 (Reuters) - The euro surged to a two-month
high and Asian stocks were set for their best gains in over two
weeks on Thursday after a bullish company forecast fuelled
optimism about the coming U.S. earnings season and underpinned
a slow return by investors to riskier assets.
Further good news came with the release of Australian
employment figures that surged well above forecasts, promising
to boost household incomes and spending and pushing the
Australian dollar to its highest since late June.
European shares were set to extend gains, with financial
spreadbetters expecting the top indexes to open up by more than
1 percent, while investors were waiting for the Bank of
England's monthly monetary policy decision.
The BOE is almost certain to leave interest rates at 0.5
percent. []
U.S. financial company State Street Corp <STT.N> said on
Wednesday that quarterly earnings would far exceed
expectations, providing a lifeline to investors after several
weeks of dismal economic reports and propelling Wall Street to
its biggest one-day gain in six weeks.
The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> rose 2.2 percent to its highest since June 29,
and looked set for its best one-day performance since June 21,
led by materials and financial shares.
Japan's benchmark Nikkei average <> rose 2.8 percent
to 9,535.74 points to mark its best one-day rise in over a
month, with exporters especially strong performers.
But market watchers were wary about whether the gains would
last, noting that the Nikkei was finding it difficult to extend
its rise much past 9,500.
Recent attempts at rallies in many markets have quickly
succumbed to profit-taking, highlighting weak investor
confidence and concerns that the global economic recovery may
be losing momentum.
Strong company earnings reports and sales forecasts in
coming weeks could soothe some of those fears.
"There are probably a lot of individual investors who have
been waiting for a day like today to lock in profits," said
Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"The 9,500 level turned into resistance several times
during June, so this could be one good level (for selling)."
But others thought the rally might have further to go, and
even Osakabe acknowledged that more short-covering could emerge
after the Nikkei was pushed to a seven-month low on Tuesday.
"It could easily be viewed as a bounce from an oversold
market in equities and risk appetite, and most people will see
it in that light," said Greg Gibbs, a currency strategist at
Royal Bank of Scotland in Sydney.
"But give it some time. They won't be immediately trying to
sell it down," he said, referring to the rally in riskier
assets.
Australian shares <> were the next strongest performer
in the region after Japan, gaining 2.2 percent, with banks
leading a broad-based rally. []
June Australian employment figures, released mid-morning,
surged to 45,900, far above market forecasts of 17,500 in a
Reuters poll, and the unemployment rate eased, reviving talk of
an interest rate hike in the next few months and eroding
arguments for a possible cut.
AUSSIE SHINES ON JOBS DATA
The data sent the Aussie dollar up more than half a U.S.
cent and more than half a yen to its strongest levels since
late June, and helped the euro breach resistance at $1.2673,
although it quickly faltered at the highs.
"The Aussie numbers came in monster. You couldn't fault any
of the detail really: it was an all-round fairly strong
number," said Sue Trinh, senior currency strategist at Royal
Bank of Canada in Hong Kong.
"Unsurprisingly the Aussie is up, with bill futures also
coming off. This leaves the door wide open for a rate hike in
August should CPI prove stronger than expected."
Australian consumer price data is due on July 28.
The Australian dollar rose to 0.8727 <AUD=D4>, gaining
around 1.1 percent on the day. It rose 1.7 percent against the
yen. <AUDJPY=R>
The euro <EUR=> climbed to a two-month high above $1.2665
and rose as far as $1.2688 on electronic trading platform EBS,
breaking above resistance at $1.2673 that had been seen as a
hurdle to further gains, but later fell back to around $1.2658.
Most analysts in a Reuters poll believe it will stay weak
against the dollar over the coming year as much of the euro
zone struggles to reduce debt levels.
The survey of about 60 analysts, taken July 2-7, predicted
the euro would fall to $1.24 in one month and $1.20 in three
months, then to $1.18 in six months and in mid-2011.
Crude oil <CLc1> initially surged past $75 a barrel as
earnings euphoria boosted shares, reinforcing overnight gains
triggered by an industry report showing U.S. crude inventories
plunged last week. By mid-afternoon it had pared gains to
around 0.7 percent and traded around $74.60 a barrel.
Gold extended its rebound, with spot gold <XAU=> rising to
around $1,204 an ounce.
(Additional reporting by Charlotte Cooper; Editing by
Kazunori Takada)
