Euro climbs toward $1.42.
The risks surrounding the euro have not eased much, with Greece fighting to avoid a debt restructuring that could have a huge ripple effect across other high risk-European countries struggling with gaping fiscal deficits.
For now though, the pendulum was swinging back to risk taking on Thursday, with volatility in precious metals and crude prices having faded, allowing investors to scamper back to scoop up recently beaten-down shares, albeit in reduced trading volumes.
European stock index futures pointed to early gains while U.S. S&P 500 futures rose 0.2 percent, suggesting a higher open on Wall Street later in the day after closing well off the lows of the day overnight.
Japan's Nikkei share average climbed 1.5 percent , with camera maker Canon Inc leading the charge. The stock surged 5.8 percent after it said on Wednesday that would buy back 50 billion yen ($610 million) of its own shares.
The Nikkei has been in a fairly narrow downtrend in May, though this week has bounced off of the April low.
The MSCI index of Asia Pacific stocks outside Japan was up 1.7 percent , the biggest daily percentage gain since April 20, after closing at a two-month low on Wednesday.
Among the domestic benchmark indexes, Korea was out in front, with the KOSPI up 2.8 percent on the first net buying by foreign investors in 10 days.
Investors kept their buying focused mostly in the energy, materials and consumer discretionary sectors, areas of the market that have been among the highest returning segments so far this year.
"The two key themes for those with a longer-term view remain demographics and consumption," said Sarah Lien, senior research analyst with Russell Investments.
"We're seeing managers still add to consumption-related stories. The thing to remember in Asia, though, is that sectors such as property, insurance and wealth management are also a play on consumption as disposable income rises," she said.
A survey by Russell Investments of 40 institutional managers globally found 63 percent still rate Asia as the most attractive investment destination, with the United States the next most-favoured at 14 percent.
A sustained equity rally in Asia with a pickup in trading volumes before the summer lull may be enough to attract some investors back to the region. The Asia Pacific ex-Japan index has underperformed the all-country world stocks index so far this year, slipping 0.3 percent compared with a 2.7 percent rise in global shares.
EURO REBOUNDS, BUT FOR HOW LONG? The euro was up 0.7 percent at $1.4188 in the early Asian afternoon, after bears were unable to push the currency below the 100-day moving average this week.
Hedge funds eager to trim their bets against the euro after it made little progress below $1.40 earlier this week helped to push it back up in Asia trading.
A Financial Times report also cited by traders as supporting the euro said that China and other Asian investors would buy a "strong proportion" of bailout bonds for Portugal to be issued next month by the European Financial Stability Facility."We've seen the euro test downwards recently, but I feel there are plenty of euro-buying needs as European investors would want to repatriate funds ahead of more potential stress tests in Europe," said Hideki Amikura, a forex manager at Nomura Trust and Banking in Tokyo.
The Australian dollar , which serves as a weather vane of investor risk taking, was up 0.7 percent at $1.0603 , trimming nearly all its losses on the week.
Oil futures were trying to add to the week's gains.
U.S. crude for July was up 0.3 percent at $101.61 a barrel while Brent was steady at $114.93 a barrel .
U.S. crude has bounced $7 since hitting the lowest since mid February in early May.
Precious metals edged higher, helped by the softer dollar. Spot gold rose 0.4 percent to $1,529.56 an ounce and silver was up 2.2 percent to $38.72 , rallying for the third straight session.
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