* Asian shares fall, ending rally ahead of US jobs data
* Weak auction for U.S. Treasury 30-yr weighs as well
* US bank test relief bolsters dollar, US stock futures
(Repeats to more subscribers)
By Rafael Nam
HONG KONG, May 8 (Reuters) - Asian shares edged lower ahead
of U.S. monthly employment data due on Friday that will provide
another step in determining whether the recent signs of an
improving global economy are real or just wishful thinking.
Also weighing on sentiment was a weak auction of 30-year
U.S. Treasury bonds on Thursday that raised worries about how
much the world's top economy will have to pay to attract
investors such as China in order to finance its massive
stimulus plans.
U.S. stocks had fallen on Thursday ahead of formal results
for stress tests for major U.S. lenders. The outcome came after
Wall Street's close and provided no real surprises.
However, the removal of the uncertainty boosted U.S. stock
futures <SPc1>, while the dollar gained broadly.
"The market is already starting to search for new trading
factors, basically looking to macro indictors for confirmation
that the global economy is truly on a rising trend," said
Masayoshi Okamoto, head of dealing at Jujiya Securities in
Japan.
The concerns over U.S. lenders that for months had dented
global stock markets have slowly dissipated over recent weeks
following U.S. regulator reassurances that the sector was
holding up better than expected and hopeful signs on the global
economy.
U.S. regulators concluded that major U.S. banks need to
raise $74.6 billion to build capital cushions, a smaller amount
than what investors had once feared. []
Instead investors have focused on signs that the global
economy may have already seen the worst of times, with a drop
in new U.S. jobless claims and better German manufacturing data
on Thursday adding to that optimism. []
The European Central Bank also joined other policy makers
in cutting interest rates on Thursday, an action that had been
widely expected, while adding it will buy up bonds for the
first time, albeit in more limited fashion than other central
banks. []
The U.S. April employment data due out at 1230 GMT could be
key in helping set a near-term course for global markets, with
economists forecastting the pace of lay-offs has eased.
Economists polled by Reuters forecast 590,000 U.S. jobs
were lost, which would be down from March, but they also expect
the unemployment rate to have gained to 8.9 percent from 8.5
percent in the previous month. []
"Given the huge amount of cash standing on the sidelines, a
positive surprise on the job report could extend the rally,"
Calyon said in a report referring to stock markets.
FINGERS CROSSED
The MSCI index of Asian stocks outside Japan
<.MIAPJ0000PUS> fell 0.2 percent as of 0420 GMT, after the
index had chalked up an 8.6 percent gain over the previous four
sessions.
That gauge is still up about 50 percent since it reached
its year low in early March.
Fund flows into Asia have seen an upswing. The EPFR
Global-tracked Asia ex-Japan Equity Funds posted the biggest
inflows among the four major emerging markets equity fund
groups for the second week running, taking in $1.62 billion.
Equity funds geared to China, Taiwan and Greater China
accounted for two thirds of this week's flows into Asia
ex-Japan Equity Funds.
But on Friday major Asian indexes gave some ground,
although Japan's Nikkei average <> managed to eke out a
0.2 percent gain, after earlier hitting a six-month high.
Other major indexes around the region, including
Australia's <> and Taiwan's <>, posted modest losses.
Shares of China Zhongwang Holdings <1333.HK>, Asia's
largest maker of aluminium extrusion products, fell about 2
percent in their Hong Kong trading debut after the company
raised $1.3 billion in the world's biggest IPO since August.
Corporate earnings reports were also a major focus for
investors in the region. Shares in Toyota Motor Corp <7203.T>
fell 3 percent after the Nikkei business daily reported the
Japanese auto maker would likley forecast an operating loss of
$7.1 billion this financial year. []
More broadly, the improving mood in global markets will
need confidence that governments worldwide have the ability to
finance the trillions being spent in spending plans or
alternative measures such as buying corporate or government
debt.
In that regard, the weak demand for a new sale of U.S.
30-year Treasury bonds was a concern.
The 30-year bond <US30YT=RR> remained under pressure during
Asia trading, with yields rising to 4.30 percent, up 1 basis
point from late U.S. trading. On the other hand, the benchmark
10-year note <US10YT=RR> gained ground, with yields down about
2 basis points to 3.32 percent.
The dollar index, a gauge for the greenback's performance
against six major currencies, rose 0.1 percent to 83.980
<.DXY>, recovering from a six-week low of 83.424 touched on
Thursday.
The euro edged down 0.2 percent to $1.3363 <EUR=> as
traders reduced long positions made the previous day after the
European Central Bank's announcement it would buy about 60
billion euros worth of covered bank bonds was seen as
underwhelming in light of much bigger similar measures taken in
other countries.
In energy markets, U.S. crude futures rose 60 cents to
$57.30 a barrel, and headed for weekly gains of more than 7
percent on signs that the global economy may have reached a
bottom.
