A recent surge in Asian
shares lost steam ahead of U.S. monthly jobs data later on Friday that
may signal whether the global economy has indeed hit bottom, after
stress tests on U.S. banks offered no real surprises.

further dose of confidence on the economy will be key in extending the
rally in global stocks, analysts said, especially as investors' worries
about the world financial system recede.

Asian shares, for
example, are up about 9 percent this week, bringing gains since their
2009 low in early March to around 51 percent.

Results from U.S.
bank stress tests released after the close of Wall Street on Thursday
showed smaller capital needs that once feared. These concerns had
already been tampered down recently after reassurances from U.S.

If anything, the report -- which show U.S. banks need
to raise a combined $74.6 billion -- helped remove a key uncertainty
that had dogged global markets earlier this year, bolstering U.S. stock
futures and likely push European shares higher at open.

But the dollar lost some ground after earlier broad gains.

now a sense that the market is already starting to search for new
trading factors, basically looking to macro indicators for confirmation
that the global economy is truly on a rising trend, said Masayoshi
Okamoto, head of dealing at Jujiya Securities in Japan.

There are
a number of signs that the global economy may have already seen the
worst of times, with a drop in new U.S. jobless claims and better
German manufacturing data on Thursday adding to that optimism.

European Central Bank also joined other policy makers in cutting
interest rates on Thursday, an action that had been widely expected,
while adding it will buy up bonds for the first time, albeit in more
limited fashion than other central banks.

There are, however,
reasons for pause. A weak auction of 30-year U.S. Treasury bonds on
Thursday raised worries about how much the world's top economy will
have to pay to attract investors such as China to finance its big
stimulus plans.

Some voices are also
warning against too much optimism. China's vice premier Wang Qishan
said the global financial crisis is spreading and the economy will get
worse before it gets better, in a written article in the Financial
Times on Friday.

The U.S. April employment data due out at 1230
GMT could be key in helping set a near-term course for global markets,
with economists forecasting the pace of lay-offs has eased.

polled by Reuters forecast 590,000 U.S. jobs were lost, which would be
down from March, but they also expect the unemployment rate to have
gained to 8.9 percent from 8.5 percent in the previous month.

the huge amount of cash standing on the sidelines, a positive surprise
on the job report could extend the rally, Calyon said in a report
referring to stock markets.


The MSCI index
of Asian stocks outside Japan <.MIAPJ0000PUS> rose 0.4 percent as
of 0620 GMT, rebounding from losses in the morning session.

Fund flows into Asia have seen an upswing, helping the MSCI index strike its highest level since early October on Thursday.

EPFR Global-tracked Asia ex-Japan Equity Funds posted the biggest
inflows among the four major emerging markets equity fund groups for
the second week running, taking in $1.62 billion.

Equity funds
geared to China, Taiwan and Greater China accounted for two thirds of
this week's flows into Asia ex-Japan Equity Funds.

Japan's Nikkei
average <.N225> rose 0.5 percent to notch a new six-month close.
Elsewhere, among the stronger gainers, shares in Singapore
<.FTSTI> rose more than 1 percent, though other indexes such as
in Hong Kong <.HSI> and South KOrea <.HSI> gained more

Some of the optimism about
stocks were marred after shares of China Zhongwang <1333.HK>,
Asia's largest maker of aluminum extrusion products, fell nearly 5
percent in their Hong Kong trading debut after the company raised $1.3
billion in the world's biggest IPO since August.

earnings reports were also a focus for investors. Shares in Toyota
Motor <7203.T> fell 1.5 percent after the Nikkei business daily
reported the world's biggest auto maker was likely to post hefty losses.

the market's close, Toyota said had lost $6.9 billion the final quarter
and forecast increasing losses this financial year.

have favored riskier assets amidst the upswing in stock markets
worldwide. U.S. crude futures rose 78 cents to $57.49 a barrel, heading
for weekly gains of more than 7 percent, on the same hopes that the
global economy may have reached bottom that are bolstering equities.

another potential source of worry could come should doubts creep up
about the ability of governments to finance the trillions being spent
in spending plans or alternative measures such as buying corporate or
government debt, as shown by the U.S. 30-year bond auction on Thursday.

30-year bond remained under pressure during Asia trading, with yields
rising to 4.30 percent, up 1 basis point from late U.S. trading. On the
other hand, the benchmark 10-year note gained ground, with yields down
about 2 basis points to 3.32 percent.

The dollar index, a gauge
for the greenback's performance against six major currencies, fell 0.2
percent to 83.739 <.DXY>, down after earlier posting modest gains.

euro was unchanged from late U.S. trade at $1.3394, after dipping
earlier when traders sold euros bought the previous day after the
European Central Bank said it would buy about 60 billion euros ($79.6
billion) worth of covered bank bonds was seen as underwhelming in light
of much bigger similar moves taken in other countries.