(Reuters) -- Asian shares steadied Wednesday as strong U.S. retail sales and data showing Germany and France avoiding a contraction last quarter bolstered investors' risk appetite, with weak euro zone growth sustaining hopes for more stimulus.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was almost unchanged after a 0.7 percent increase the day before. Japan's Nikkei stock average <.N225> opened up 0.3 percent, helped by a weaker yen. .T
"We think this calm may last a few more days but see scope for volatility to pick up due to important upcoming events," such as the Jackson Hole, Wyo., meeting of central bankers and economists at the end of the month and the U.S. nonfarm payrolls data due early in September, Barclays Capital said in a note.
U.S. retail sales rose 0.8 percent in July for the first time in four months for the largest gain since February as demand climbed for consumer goods, suggesting that households could drive faster economic growth in the third quarter after the second quarter's slowdown.
A separate report showed U.S. producer prices rose in July at the fastest pace in five months even as energy prices fell.
The euro zone's economy shrank 0.2 percent in the second quarter, having flatlined in the first, falling prey to its prolonged debt woes while core economies Germany and France withstood contraction in the same period.
But Germany's forward-looking ZEW sentiment index slid for a fourth month running, clouding the outlook for the region's growth engine.
Strong U.S. retail sales boosted oil, copper and the dollar but U.S. stocks lost momentum on Tuesday, while European shares rallied as weak euro zone growth made the case for further policy moves to support recovery.
U.S. Treasuries and German government bonds faltered, however, as uncertainty over whether the U.S. data could still justify further easing by the Federal Reserve and the resilience of the German economy prompted investors to cut some safe-haven bids.
"The USD benefits from better U.S. data (retail sales). For now, it is mostly USD/JPY trying to break higher as the back end of the US Treasury curves comes under pressure," said Sebastien Galy, senior currency strategist at Societe Generale in New York, in a research note.
He added that the euro is supported against the dollar as investors look for yield in European bonds.
The euro steadied at $1.2324 and the dollar firmed 0.1 percent against the yen at 78.82 yen, after hitting a one-month high of 78.94 yen on Tuesday.
Asian credit markets eased slightly, with the spread on the iTraxx Asia ex-Japan investment-grade index tightening by 2 basis points.
Brent oil futures inched down 0.2 percent to $113.85 a barrel after ending at a fresh three-month high on Tuesday due to strong U.S. retail sales, tighter North Sea crude supplies and speculation about economic stimulus. U.S. crude fell 0.3 percent to $93.20 a barrel after closing up nearly 1 percent on Tuesday.
Spot gold recovered 0.21 percent to $1,600.39 an ounce after investors scaled back their expectations for the Fed's further easing following the solid U.S. retail sales data and pushed bullion down as much as 1 percent.