Asian stocks were largely unchanged on Thursday ahead of the latest U.S. payrolls report, while the U.S. dollar remained near a three-week low against the euro, sensitive to lingering doubts about its reserve status.

The U.S. unemployment rate is forecast to rise to a 26-year high of 9.6 percent, which would test even the most die hard bulls on the extent of the recovery underway even after Wednesday's positive manufacturing figures from China, the euro zone and the United States.

Manufacturing data from the United States and other major economies came out quite solid, but investors remain cautious ahead of U.S. jobs data and corporate earnings, said Yoo Soo-min, a market analyst at Hyundai Securities in Seoul.

Japanese government bond futures slipped, with investors focused on the results of a 2.1 trillion yen ($21.7 billion) auction of 10-year bonds meant to help Tokyo finance stimulus spending. The level of market demand for the bonds will be key in judging how expensive borrowing will be for the government.

Crude prices edged up toward $70 a barrel, with a reported increase in U.S. gasoline inventories ahead of the summer driving season not able to keep oil down for long.

Japan's Nikkei share average <.N225> was flat on the day but far from an eight-month high reached three weeks ago.

The MSCI index of Asia Pacific stocks outside Japan <.MIAPJ0000PUS> rose 1 percent, with strength concentrated in the technology and materials sectors.

Stocks in Taiwan rose 1.4 percent, outpacing the region as investors eager to gain exposure to Chinese economic growth prospects pushed the benchmark TAIEX index <.TWII> to a fresh one-month high.

Valuations of technology firms in Taiwan, on a 12-month forward price-to-earnings basis, have been coming down in the last few months and are currently around 23 times compared with 50 times in April, according to global estimates tracker I/B/E/S.

That has opened up entry points for investors in stocks such as mobile phone chipmaker Mediatek <2454.TW>, which was up 2.4 percent.

The U.S. dollar made up some lost ground against major currencies after it fell on Wednesday on news China was seeking debate on proposals for a new global reserve currency at next week's Group of Eight meeting.

However, dealers were cautious about taking big positions ahead of the June U.S. employment report that is expected to show payrolls fell 363,000.

U.S. private employers slashed a bigger-than-expected 473,000 jobs in June, according to a report from ADP Employers Services on Wednesday, making the market wary that the government's data may show more losses than forecast.

The ADP number was worse than expected so now there might be some downside risk in payrolls which makes it harder to take large positions, said Yuki Sakasai, currency strategist at Barclays Bank Tokyo.

The euro was trading nearly unchanged on the day at $1.4134, having carved out a $1.4340 to $1.3750 range since hitting a high for the year on June 3.

The Australian dollar was down 0.3 percent to US$0.8065, weighed down after trade data showed a much larger-than-expected shortfall of AU$556 million.

The 10-year Japanese government bond futures contract fell 0.15 point ahead of auction results at 0345 GMT (11:45 p.m. EDT).

The end of the first half of the year saw heavy buying of JGBs, especially late maturities, narrowing the difference between the 10-year yield and the 2-year yield by 14 basis points in the last month.

The yield on the benchmark U.S. 10-year Treasury note was at 3.55 percent, roughly where it was at the end of New York's trading day on Wednesday.

U.S. light crude for August delivery rose 0.4 percent to $69.58 a barrel, within sight of Tuesday's eight-month high of $73.38 a barrel.

(Additional reporting by Charlotte Cooper in TOKYO and Jungyoun Park in SEOUL)