GLOBAL MARKETS-Stocks up, euro weakens ahead of U.S. jobs data

                                
 * Risk-on trend continues, traders eye non-farm payrolls
                                
 * Banks lead gainers, rebound after stress test results
                                
 * Dollar firms vs major currencies
                                
 
                                
 By Simon Jessop
                                
 LONDON, April 1 (Reuters) - World stocks rose and the euro
weakened slightly against the dollar on the opening day of the
second quarter, ahead of U.S. jobs data expected to give further
impetus to those investors betting on improving world growth.
                                
 That positivity had earlier pushed Asia shares, ex-Japan, to
near-three-year highs, although concerns over euro zone debt,
Japan's nuclear crisis and conflicts in the Middle East all have
the potential to nix the rally.
                                
 After eaking out a small gain in the first quarter, European
equities <.FTEU3> made a healthy stab at retracing the previous
day's 0.9 percent slide and by 0804 GMT were up 0.8 percent.
                                
 Elsewhere, the MSCI world equity index <.MIWD00000PUS> and
the Thomson Reuters global stock index <.TRXFLDGLPU> were up
around 0.2 percent, while emerging stocks <.MSCIEF> were up 0.7
percent.
                                
 The Nikkei <.N225> proved the major loser in overnight Asian
trade, closing down 0.5 percent after hitting technical
resistance and on concerns about corporate profits in the wake
of its recent natural disasters. [ID:nL3E7F10YN]
                                
 Traders said all eyes were on the release of U.S. non-farm
payrolls data at 1230 GMT, which is expected to show 190,000
people were hired in March, fuelling optimism about the
sustainability of growth in the world's largest economy.
                                
 A positive reading "is set to boost risk appetite as the
global recovery begins to gather momentum, said Jonathan
Sudaria, night dealer at Capital Spreads. 
                                
 Among the top movers were Irish banking shares, a day after
Dublin released details of stress tests showing its banks needed
an extra 24 billion euros, in line with expectations, pushing
the total bailout cost to $100 billion. [ID:nLDE72T20R]
                                
 The STOXX Europe 600 Banks <.SX7P> was up 1.6 percent by
0828 GMT, leading sectoral gainers across the region.
                                
 The pre-jobs report, risk-on mode was also evident in the
currency markets as the yen fell to a 10-month low against the
euro and slid beneath a key technical level against the dollar,
which could be set for further gains.
                                
 "A strong non-farm payrolls number would be reflected in the
dollar/yen and it could rise to 84.50 in the short term," said
Simon Derrick, head of currency research, at Bank of New York
Mellon. "We expect to see prolonged yen weakness due to loose
monetary and fiscal policy in Japan."
                                
 The dollar was up 0.6 percent to 83.65 yen <JPY=> at 0808
GMT, after earlier hitting a six-week high of 83.748 yen on
trading platform EBS earlier, and rising above its 200-day
moving average against the yen.
                                
 The dollar also firmed 0.3 percent against a basket of major
currencies <.DXY> and strengthened against the euro <EUR=> to
$1.4150.
                                
 Hawkish overnight comments from a senior U.S. Federal
Reserve official suggesting, in a Wall Street Journal report,
the Fed could raise interest rates by three-quarters of a
percentage point by the end of the year, also helped buoy the
greenback. [ID:nN31167243]
                                
 Elsewhere among macroeconomic data on Friday, traders will
eye the latest U.S. ISM numbers, due out at 1400 GMT. The
release follows that of Chinese factory data overnight which
showed production rose while cost inflation slowed, easing
concerns about monetary tightening. [ID:nL3E7F104Q]
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
  Insider TV-Chart view:        http://link.reuters.com/suv68r
  Reuters polls on world stock markets:        [ID:nLDE72K1HU]
  World growth, inflation:         http://r.reuters.com/bex68r
  Euro zone PMI, earnings momentum:http://r.reuters.com/qew68r
  European sovereign debt crisis:  http://r.reuters.com/hyb65p
  Japan disaster in figures:       http://r.reuters.com/ser58r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

                                
 BUNDS FALTER
                                
 Government debt markets in Europe were set for another
event-filled day, with Portuguese bond yields set to test fresh
record highs.
                                
 The peripheral euro zone nation -- seen next in line by the
markets for an international bailout -- missed its 2010 budget
deficit target in the previous session, prompting a widening in
its spread to benchmark bunds. [ID:nLDE72U17E]
                                
 Early on Friday, bund futures <FGBLc1> were down 32 ticks,
continuing its broad downtrend since the start of the year, as
traders position themselves for a European Central Bank interest
rate rise next week. [ID:nLDE73005Y]
                                
 U.S. Treasuries were little changed in Asian trading, ahead
of the jobs report, while Brent crude rose towards $118 a barrel
on expectations for demand from the world's biggest importer.
[ID:nL3E7F113U]
  (Additional reporting by Anirban Nag; Editing by Toby Chopra)