Most Asian shares edged up on Thursday, heading for a quarterly gain despite a sharp sell-off earlier this month after disaster struck Japan, while the yen was poised for a quarterly loss on expectations Tokyo will have to maintain super-loose monetary policy far longer than Europe and the United States.

Concerns about the impact on high oil and food prices on global growth and central bank moves to curb inflation have overtaken worries about Japan's nuclear crisis and unrest in the Middle East, but investors remain cautious.

Shares are modestly expanding gains on continued foreign buying around sectors that are seen bullish, said Chung Seung-jae, a market analyst at Mirae Asset Securities in Seoul.

MSCI's index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rose 0.3 percent on the day, putting it on track for a 4.3 percent gain in March despite a sharp downward spike following the massive earthquake and tsunami which hit Japan on March 11, severely damaging a nuclear power plant and knocking many factories offline.

For the year to date, the Asia ex-Japan index has gained nearly 1 percent.

By comparison, the MSCI world index <.MIWD00000PUS> was little changed on the quarter, but has gained around 4 percent so far in 2011. Relative weakness in Asia was offset by strong gains early in the year in major U.S. and European indexes as investors rotated from emerging markets to large, developed ones.

A key investment decision for Asian stock investors in the coming months will likely be whether to pile bets on China and the faster-growing economies in Asia over safer but lower-returning investments in developed economies, analysts said.

Gross domestic product of emerging markets will on average expand 6.0 percent in 2011 and 2012, more than double those of developed markets, according to JPMorgan economists.

In Asia, Japan is expected to lag its neighbors as the world's No. 3 economy faces huge rebuilding cost from the twin disasters this month and the still unknown toll from the damaged nuclear plant, which is still leaking radiation.

The yen has declined to the lowest since May 2010 against the euro in the wake of recent hawkish comments by euro zone officials signaling interest rate hikes, and has slid against the dollar as well after U.S. central bank officials indicated they may soon start withdrawing enormous levels of stimulus from that economy.

Japan's Nikkei index <.N225> trimmed gains to trade flat after opening higher and following Wednesday's 2.6 percent rally. So far in March, it has shed 9 percent, heading for its worst month since May 2010. Year to date, the benchmark has fallen around 5 percent.


The weaker yen is expected to boost the demand for Japanese goods in overseas markets, though investors remain concerned about the impact of power shortages on Japanese manufacturers following the disasters.

It is also seen as a cheap way to fund higher-yielding assets such as the Australian dollar which reached a 10-month high against the yen and a 29-year high against the U.S. dollar in early trading.

But the yen on Thursday pulled back from its earlier lows, trading flat against major currencies.

The dollar was last at 82.83 yen, up 9 percent from its record low of 76.25 yen on March 17 before G7 central banks intervened in a rare coordinated move to stem the yen's rise.

The euro last traded at 117.16 yen. It had risen high as 117.54 yen earlier, its highest since May 2010, bringing its gains this year to 8 percent.

Concerns over Japan's nuclear crisis, conflicts in the Libya and nagging fiscal problems in Europe have eased, for now, with expectations that stocks worldwide will move higher into the new quarter on an improving economic outlook, analysts said.

Gold rebounded from initial losses tied to profit-taking. It snapped a four-session losing streak on Wednesday.

Spot gold traded at $1,425.65 an ounce, compared with $1,423.38 late in New York on Wednesday. It has been running 2 percent below the record of $1,447.40 set on March 24.

U.S. oil prices rose after falling on Wednesday on data showing ample inventory in the United States, the world's biggest energy consumer. This offset worries over supply disruption from the turmoil in Libya and the Middle East.

U.S. crude was up 41 cents to $104.68 a barrel, while Brent crude advanced 42 cents to $115.55.

(Reporting by Natsuko Waki and Antoni Slodkowski in TOKYO,; Lewa Pardomuan and Randy Fabi in Singapore,; Park Jung-youn in SEOUL; Editing by Ramya Venugopal)