* MSCI Asia ex-Japan up 0.3 pct, Nikkei gains 1 pct
* Oil drifts without clear direction as Sandy fallout eyed
* Currencies return to recent ranges ahead of US jobs data
* European shares likely to fall
TOKYO, Oct 31 (Reuters) - Asian shares rose as risk appetite
recovered after European equities and the euro firmed overnight,
and investors looked to coming U.S. and Chinese data for fresh
clues on direction.
Key currencies stayed in recent ranges on Wednesday, waiting
for developments in Europe on efforts to solve the debt crisis
and for the U.S. monthly jobs report on Friday as well as
China's official manufacturing PMI on Thursday.
European shares were seen cautious after rising on Tuesday
on a slew of shareholder-friendly corporate news. Financial
spreadbetters expect London's FTSE 100, Paris's CAC-40
and Frankfurt's DAX to open as much as 0.2
U.S. stock futures were up 0.1 percent, suggesting a
mild uptick when Wall Street resumes trading on Wednesday, along
with U.S. bond markets, after New York was lashed by Sandy, the
worst storm to batter the metro area in 75 years.
The MSCI index of Asia-Pacific shares outside Japan
rose 0.3 percent, off a two-week low hit on
Tuesday. At its current level, the index has a marginal monthly
gain of 0.2 percent, after September's 5.6 percent rise.
Australian shares ended with a 0.7 percent rise,
supported by a rebound in copper prices which boosted miners.
South Korean shares also climbed 0.7 percent on the day
after the country snapped a three-month run of falls in
industrial output in September, which raised hopes for a
turnaround in Asia's fourth-largest economy.
Hong Kong's Hang Seng Index added 0.5 percent,
bouncing off a near two-week low on strength in Chinese banks
after the largest, Industrial and Commercial Bank of China,
posted forecast-beating third-quarter earnings. The index was
set for a second-straight monthly gain.
"European markets had a nice bounce yesterday, so markets in
Asia have really responded to the strong performance in Europe,"
said Guy Stear, head of research with Societe Generale in Hong
"It's difficult to say we are really in a 'risk on' period
because people are really focused on company specific news"
rather than macroeconomic news, he said, adding that Asian
markets have not yet recovered to highs in mid-October.
Data showed on Wednesday that Taiwan's economy grew by
slightly less than expected in the third quarter, and the
Markit/JMMA Japan Manufacturing Purchasing Managers Index posted
its fastest pace of contraction in 18 months in October.
Elsewhere in Asia, Indonesia's benchmark index fell
0.7 percent after closing at a record high on Tuesday as strong
quarterly earnings from banks helped lift sentiment. Malaysia
shares eased 0.1 percent after a record close for the
fourth straight session as investors piled into banking stocks.
Stear said Southeast Asian markets largely benefitted from
how investors, worried about China's growth outlook, were
putting money elsewhere in Asia, where they saw better
prospects. But Southeast Asian markets look expensive and when
worries about China subside, investors may pull money out of
them and return to China, he said.
"International fund managers are increasing their allocation
to this part of the world, but there is little reason for
investors to come into the market now," said Hong Hao, chief
strategist with Bank of Communications International Securities,
referring to Chinese shares listed in Hong Kong.
Japan's Nikkei average closed up 1 percent, bouncing
back from profit-taking the day before when the Bank of Japan's
easing steps largely matched expectations.
The yen came off a one-week high of 79.275 yen
against the dollar hit on Tuesday when the BOJ's latest easing
measures spurred players to close their yen short positions. The
dollar was last trading 0.1 percent lower at 79.52 yen.
"Concerns over Japan's fiscal problems and deteriorating
trade balance are behind the current phase of yen weakness and
the BOJ easing is just one catalyst," said Yuji Saito, director
of foreign exchange at Credit Agricole in Tokyo.
"So having cleared the post-BOJ positions, the dollar/yen
will likely steady ahead of the U.S. jobs data and the U.S.
presidential election," he said, adding that dollar/yen
resistance was seen at 80.50 to 80.60 yen, a 50 percent
retracement of the 2012 high of 84.187 hit in March and the
year's low of 77.13 touched in September.
The euro steadied at $1.2960, stuck to its
$1.2800/$1.3200 range seen since mid-September.
Traders said the single currency was unlikely to break out
of that range until fresh news emerged from Europe to provide
clear progress in its debt crisis management.
Spain has yet to apply for an external rescue which would
initiate the European Central Bank's bond buying programme to
ease borrowing strains and global lenders haven't given Greece
another tranche of bailout.
Euro zone finance ministers will hold a conference call on
Wednesday to discuss progress in negotiations on the revised
Greek bailout but are not expected to make any decisions yet,
two euro zone officials said on Tuesday.
Oil prices recovered, with U.S. crude futures up 0.3
percent at $85.93 a barrel and Brent up 0.1 percent at
$109.17 as investors waited to assess the impact from Sandy,
which paralysed much of the U.S. East Coast region that
consumes about one-quarter of the nation's total fuel.
Asian credit markets firmed along with equities, narrowing
the spread on the iTraxx Asia ex-Japan investment-grade index
by 5 basis points.