Shares in Asia rose on Monday after U.S. data showed a slowdown in layoffs, while Chinese shares extended gains on hopes that Beijing will pull out more policy tools as needed to support its volatile stock market.
Investors were also heartened after G20 finance ministers and central bankers agreed to keep economic stimulus measures in place for longer.
Major European stocks were expected to rise as well, with futures on the Dow Jones Eurostoxx 50 up 1.1 percent.
The G20 outcome, in addition to Friday's draft rules from China allowing more foreign portfolio investment, helped give a broad boost to Asian equities.
Even though U.S. payrolls data on Friday showed the unemployment rate jumping to a 26-year high, the total monthly decline in jobs was the lowest in about a year.
Economists at Rabobank said in a note to clients that while the worst U.S. recession since the Great Depression likely ended in June or July, it is likely the labor market will then take several months to stabilize before positive jobs growth resumes.
Analysts have noted that the strong relationship of stocks, commodities and higher-yielding currencies rising together seems to be weakening, which some see a signal that some of these trades are crowded just as valuations were looking steep.
The Australian dollar and commodity prices, which have usually risen along with equities, were largely steady despite the solid gains in stocks.
Japan's Nikkei share average <.N225> rose 1.6 percent on buying of technology-related stocks and large exporters.
Advantest Corp <6857.T> and other chip-related shares gained, buoyed by broad buying of their U.S. peers after Intel Corp's
The MSCI index of Asia Pacific stocks outside Japan rose 1.2 percent <.MIAPJ0000PUS>, nearing the 11-month high reached in August. The technology and consumer discretionary sectors, which have been very popular for the last six months, led the gains.
Some analysts have warned that momentum, rather than value, is driving Asian stocks at this point, with valuations on the benchmark MSCI index up near the 2007 bull market highs based on prices compared with expected earnings one year forward.
That one-year forward P/E ratio stands at 15.1 after reaching 15.41 in August, the highest since late 2007, according to data from Thomson Reuters I/B/E/S.
The Shanghai Composite index <.SSEC> of domestic stocks rose 1.1 percent as investors jumped back into property-related shares in the wake of Friday's draft changes raising the limit that foreign institutional investors are allowed to invest in the country's markets.
After plunging 22 percent in August, the Shanghai index has already bounced 9 percent after nearly five trading days in September. <.SS>
BlackRock, one of the world's largest asset managers, said it had already begun buying A-shares before the announced change in QFII rules but that shift was a signal that Beijing did not want asset prices falling too much.
Hong Kong's Hang Seng index <.HSI>, which unlike the Shanghai market is completely open to foreign investors, rose 1.4 percent, on strength in the large cap banks. <.HK>
U.S. stock markets will be closed on Monday for the Labor Day holiday.
DATA BUOYS AUSSIET
The Australian dollar was up slightly on the day at S$0.8522, after earlier touching a one-year high.
The Aussie got a partial boost from data showing job advertisements rising for the first time in 16 months in August, adding to the signs of an accelerating economy that has stoked expectations for higher rates in coming months.
Short-term speculators on the International Monetary Market only slightly trimmed their net long Australian dollar positions, but slashed their net long euro positions and nearly trebled their net long yen positions, data up to Sept 1 showed.
Short-covering was thus likely to blame for some broad weakness in the yen, traders said.
The dollar rose 0.2 percent to 93.20 yen, bouncing further from around 91.90 yen reached last Thursday, a near two-month low.
U.S. crude for October delivery rose 25 cents, or 0.4 percent, to $68.27 a barrel. Brent was up 0.7 percent to $67.27 a barrel.
Some analysts zeroed in on the more bearish parts of the August U.S. payrolls report which showed the unemployment rate rising more than expected, despite a bigger than forecast improvement in payrolls.
As the long Labor Day weekend comes to an end, we're looking at the end of peak gasoline demand season in the U.S., which means we're now entering a period of slack seasonal demand with refineries scaling back their production, said Toby Hassall, a commodities analyst at CWA Global Markets in Sydney.
High unemployment in the U.S. also underscores the weakness we're seeing in the consumer sector, which will put a handbrake on the overall recovery in energy demand even as we see industrial demand recovering.
Gold in the spot market was down 0.2 percent to $991.60 per ounce.
U.S. gold futures for December delivery were down 0.3 percent at $994.20 per ounce, after settling down $1 at $996.70 on Friday. The contract rose to $999.50 on Thursday, the highest since February.
(Additional reporting by Fayen Wong in Perth)
(Editing by Kim Coghill)