Asian shares rose to a two-month high on Thursday and commodities and the euro also firmed on hopes that the International Monetary Fund would boost its resources to help tackle the euro zone debt crisis.

Strong U.S. manufacturing reports also spurred buying in Asia after data showed factory output grew at its fastest pace in a year, putting the world's largest economy on firmer footing.

The MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> rose 0.8 percent by early afternoon.

Financials <.MIAPJFN00PUS> and materials sectors <.MIAPJMT00PUS> ranked among the top performers as base metals such as copper climbed to a four-month high and oil advanced nearly 1 percent.

Japan's Nikkei average <.N225> rose as much as 1.4 percent to a five-week high. <.T>

Financial spreadbetters expected Britain's FTSE 100 <.FTSE>, Germany's DAX <.GDAXI> and France's CAC-40 <.FCHI> to start about 0.2 to 0.7 percent higher. U.S. stock futures were little changed.

Markus Rosgen, head of Asia strategy at Citigroup in Hong Kong, said recent resilience in equities suggested a rebalancing from last year's extreme risk-aversive stance, which could leave fund managers underperforming if prices kept rising.

The global growth environment may be not great but it is not disastrous, either. Equities are pricing in a pretty bad environment, but it's not as bad as prices suggest, he said.

Current mid-cycle valuations in Asia are at a level justifiable only if there were a global recession, Rosgen said.

Now and then, there will be de-risking but by and large, most people are still too bearish on global growth, meaning that if the markets kept rising, it will drive more people out of safety to take more risk, he said.

Gains in commodities, the euro and equities supported gold, setting up bullion for a fourth session of gains. Spot gold was up 0.3 percent to around $1,665 an ounce.

The IMF is seeking to more than double its war chest by raising $600 billion in new resources to help countries deal with the fallout from the euro zone debt crisis, but the United States and other countries are balking, saying Europe must put up more of its own money.

Smooth debt sales by Portugal and above-estimate earnings from Wall Street powerhouse Goldman Sachs Group Inc added to the positive mood, just as investor risk-aversion had started to weaken after assets posted gains early in the new year.

Recent data has suggested the euro zone's problems have not seriously derailed global economic activity, though the continent's rapidly cooling growth is clearly weighing on Asia's export-reliant economies.

Australian employment suffered a surprise fall in December for the second straight month of decline, raising the prospect for more interest rate cuts. The Australian dollar fell to a session low of $1.0376.

GREEK TEST

Greece, striving to avoid bankruptcy by restructuring its debt, kept hopes alive that a deal could be struck to grant the cash-strapped country much-needed funds, although the uncertainty surrounding the negotiations remained a big risk to markets.

International creditors and the Greek government are haggling over the interest rate that Athens will offer on new bonds and its plan to enforce private investor losses.

Investors will also face more tests to their risk tolerance later on Thursday when Spain and France tap the markets with longer-dated debt offers.

Debt sales in the euro zone have so far met decent demand despite Standard & Poor's mass downgrade of euro zone sovereigns last Friday.

Portugal, the only euro zone country apart from Greece that is given junk status by all the major rating agencies, on Wednesday sold out its planned issuance of treasury bills, while Germany drew strong demand for its two-year bonds.

The euro steadied at $1.2861, holding above $1.2624 hit last week, its lowest since late August 2010.

Given that several risks lie ahead, investors are likely to view this current short squeeze as an opportunity to re-enter short euro positions, analysts at BNP Paribas wrote in a client note.

The European Central Bank's ample funding operations removed fears of an imminent credit crunch in Europe and reduced the safe-haven demand for U.S. Treasury bills, which for the first time in seven weeks were sold at an interest rate above zero on Wednesday.

Overall recovery in risk helped improve Asian credit markets, with spreads on the iTraxx Asia ex-Japan investment grade index narrowing by 3 basis points.

(Additional reporting by Ian Chua in Sydney; Editing by Kim Coghill)