* Resource shares lift stocks, US jobs data awaits
* U.S. dollar weakness is the global focus
* Australia dollar leaps after strong jobs data
(Repeats to more subscribers)
By Kevin Plumberg
HONG KONG, Oct 7 (Reuters) - Asian stocks edged up to a
two-year high on Thursday, supported by resource-related
shares, but gains were capped and the U.S. dollar held near a
15-year low against the yen before a U.S. jobs report on
Friday.
After data overnight showed U.S. private sector employment
surprisingly shrank in September, the potential has increased
for the official payrolls report to reflect weakness and
accelerate what has become the cheap money trade: sell dollars,
buy bonds, equities and gold. []
This trade has been driven by expectations the Federal
Reserve at its policy meeting next month will shift toward
quantitative easing (QE), effectively flooding the financial
system with cheaply borrowed cash.
The greater chance of a soft U.S. payrolls number made the
dollar's disadvantages all the more stark, especially after
data showed Australian employment in September was more than
double forecasts, driving the Australian dollar to the highest
since July 2008 against the dollar.
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In equities, Japan's Nikkei share average <> gained
0.1 percent, adding to the week's 3.3 percent rise. The index
is outperforming the U.S. S&P 500 index <.SPX> and the
FTSEurofirst 300 index <>, which are both up 1.2 percent
so far this week.
The MSCI index of Asia Pacific stocks outside Japan was up
0.25 percent <.MIAPJ0000PUS> to the highest since June 2008.
The 11.6 percent rise in the index last month exceeded the
all-country world index by two percentage points and has been
driven by the consumer discretionary, energy, industrial and
materials sectors.
Investors remain focused on the U.S. dollar, which fell 8.5
percent against a basket of major currencies <=USD> in the last
quarter.
Goldman Sachs analysts revised their forecasts for the
dollar downward, expecting Asian currencies to shoulder more of
the burden of currency strength in coming months.
"The combination of weaker growth, more QE, FX policy
pressure on Asia for more currency appreciation and widening
external imbalances all point in the same direction: broad USD
weakness. And this is likely to remain the dominant theme," the
analysts said in a note.
The euro has benefited from the dollar's weakness and hit
an eight-month high of $1.3949 overnight. It was down 0.1
percent on the day at $1.3910 <EUR=>.
The European Central Bank will meet to review policy later
though no changes are expected. Dealers will listen for any
comment on the euro's rapid 7.5 percent gain last month.
The dollar was trading at 82.90 yen <JPY=>, not far from
the 15-year low of 82.75 yen plumbed on Wednesday.
Precious metals have been other beneficiaries of dollar
weakness. Gold was largely unchanged on the day after touching
a record high of $1,349.80 an ounce on Wednesday <XAU=>. Since
August, gold has risen 14 percent.
(Editing by Miral Fahmy)
