Asian stocks hit a 17-month high on Monday as a strong rebound in China's exports raised investor optimism about Asia's economies while the dollar suffered its biggest loss in six weeks after poor U.S. jobs data.

European shares were expected to gain, financial spreadbetters said, as the dollar's weakness pushed the euro to a three-week high. U.S. stock futures were up 0.4 percent.

China's exports and imports last month blew past expectations, with exports surging 17.7 percent from a year earlier to break 13 months of declines. The trade data, released on Sunday, triggered a shift into Asian assets as investors shrugged off Friday's disappointing U.S. non-farm payrolls data.

Gold pushed up to a five-week high at $1,157.65 an ounce at one point as the data showed a sharp rise in China's commodities imports and sent the Australian dollar to a 26-month peak against the euro.

Chia-Liang Lian, a senior vice president at bond fund PIMCO, said Asia's fundamentals made it highly attractive.

We have seen how Asia has navigated successfully through a tough year with a score card that is nothing short of spectacular, Lian told Reuters in an interview.

The MSCI index of Asia Pacific stocks traded outside Japan <.MIAPJ0000PUS> hit its highest level since July 2008, gaining 1.2 percent. The Thomson Reuters index of Asian shares <.TRXFLDAXPU> was 0.8 percent higher.

Japanese financial markets were closed for a public holiday.

Australia's leading share index <.AXJO> climbed 0.8 percent to a 15-month high as the China data lifted resource companies that benefit from Chinese demand.

People are gradually getting more comfortable with the recovery story. You have seen some reasonably good data out of China, and there have been no disasters, no more Dubais, said Greg Goodsell, equity strategist at RBS Australia.

The Australian dollar soared to its highest in more than two years against the euro and to a five-week high against the dollar.


Resource-related shares gained in Hong Kong, including Aluminum Corp of China (Chalco) <2600.HK> <601600.SS>, the country's top aluminum company, which surged 5 percent, and Jiangxi Copper <0358.HK><600362.SS>, China's top metals producer, which rose more than 3 percent.

Chinese brokerage shares gained in Shanghai after news late last week that Beijing had decided to allow stock index futures and margin trading.

The dollar, however, extended losses stemming from the jobs report, which dampened expectations of an early rise in U.S. interest rates.

A member of the U.S. Federal Reserve monetary policy committee, James Bullard, said on Monday that rates may remain low for quite some time, reiterating the central bank's long-standing position.

The dollar dropped 0.5 percent against a basket of currencies <.DXY> and was quoted at a three-week low at around $1.4533 against the euro.

The U.S. economy shed 85,000 jobs in December, confounding expectations that the job market was finally stabilizing. Still, analysts argued the outcome was consistent with economic recovery because the pace of job losses had dropped sharply since the height of recession.

Oil jumped more than 1 percent, topping $83 a barrel, on the back of the weak dollar, extremely cold weather in the northern hemisphere and a surge in China's crude oil imports last month.

China's export rebound fueled expectations China could soon let the yuan start rising again and helped push Asian currencies higher as a stronger yuan would benefit pricing for fellow Asian exporters.

The high-yielding Indonesian rupiah jumped 1 percent to 9,120 to the dollar, despite suspected intervention by the central bank. It has gained 3.3 percent so far this year as investors have sought out higher-yielding assets.

South Korean authorities were also seen intervening to curb the won which touched a 15-month high of 1,117.5 to the dollar.

PIMCO's Lian said Asian currencies were still undervalued on a trade-weighted basis and cited the yuan, the won and the Singapore dollar among his top currency picks. He also likes Indonesian debt which offers better yield than other Asian debt.

(Additional reporting by Saikat Chatterjee in HONG KONG and Victoria Thieberger in MELBOURNE; Editing by Jan Dahinten)