Nikkei rallies, others subdued ahead of U.S. payrolls

SYDNEY, (Reuters) - The Nikkei rallied on Thursday  as investors snapped up shares of Japanese exporters after the  dollar hit two-week highs against the yen, but markets  elsewhere in Asia were more subdued ahead of the influential  U.S. non-farm payrolls report.

Copper climbed 1 percent to a high of $9,654.25 a tonne, nearing a record high of $9,754 struck on Tuesday, after an ADP report showed a record 297,000 U.S. private  sector jobs were created in December, the clearest signal in  months that a recovery in the world’s biggest economy was  shifting up a gear.

 The figure prompted analysts to raise their forecasts for the closely watched non-farm payrolls data, with estimates now  centring on an increase of 175,000 jobs, up from 140,000 in an  eaarlier Reuters survey.

 While some analysts were sceptical of the size of the jump in the ADP job report, it does follow a string of recent  upbeat U.S. data showing the economy is picking up steam.

 “Markets will now wait for U.S. payrolls on Friday for confirmation of the strong trend,” said Hiroaki Osakabe, a  fund manager at Chibagin Asset Management. “But investors will  then focus on how the U.S. data will impact the dollar/yen  rate.”

  Japan’s Nikkei 225 index rose 1.2 percent and breached the psychologically important barrier of 10,500 to  reach its best level since May 2010.

 Major exporters including Canon Inc and Toyota Motors climbed more than 1 percent.

 MSCI’s Asia Pacific index excluding Japan , however, slipped 0.1 percent, having drifted in and out of  positive territory. Earlier this week technical indicators  showed it was close to being overbought after a strong  end-2010 rally, making investors wary that markets were due  for a pullback.

 South Korea’s KOSPI and Hong Kong’s Hang Seng index were both flat, while China’s Shanghai Composite  index shed 0.7 percent.

 Australia’s S&P/ASX 200 index reversed early gains ad slid 0.4 percent as concerns over severe floods in the  country’s northeast made investors unsure of how to judge  company earnings in 2011.

 Global miner BHP Billiton fell 0.5 percent and  Rio Tinto eased about 0.1 percent.

  DOLLAR FIRM

 The dollar rose to 83.39 yen , reaching highs not seen since Dec. 23, while the euro wallowed below $1.3200, having fallen below that level overnight for the first  time since Dec. 29.

 The dollar index , which tracks the greenback’s performance against a basket of major currencies, was little  changed at 80.218, after topping out at a fresh one-week high  of 80.353.

 “As long as the key jobs data on Friday is in line with expectations, the dollar is likely keep its gains, but it  looks hard for it to climb higher as the market has already  priced in good numbers,” said Hideki Hayashi, a global  economist at Mizuho Securities.

 U.S. crude oil  edged up 0.1 percent to $90.42, after trading as high as $90.71, not far from a  27-month high of $92.58 set in the first trading day of the  year.