Asian shares looked set on Friday to post their strongest week in five months as global investors returned to riskier assets after a string of positive U.S. economic data and a bounce in oil and commodity prices.
That optimism is likely to flow through to European shares, with financial spreadbetters expecting Britain's FTSE 100 .FTSE, Germany's DAX .GDAXI and France's CAC .FCHI to all open 0.5 percent higher.
The rebound could continue if the February U.S. employment report later in the session shows job gains but remains weak enough to discourage Federal Reserve rate increases in the near term.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent to the highest in almost two months. That put in on track for a 5.5 percent gain for the week, its strongest weekly performance since October.
Japan's Nikkei .N225 closed up 0.3 percent, producing a weekly gain of 5.1 percent.
"Globally, markets are rolling back the extreme risk-off trading they did in January and February," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "Part of the reason is that the Fed seems to be easing its insistence on raising rates."
Chinese shares, reversed earlier losses, with the Shanghai Composite index .SSEC climbing 0.2 percent, heading for a weekly gain of 3.5 percent. The CSI 300 .CSI300 advanced 1 percent, extending gains this week to 4.7 percent.
Investors are awaiting the start of the annual meeting of China's parliament on Saturday, which will map out economic goals for the next five years.
The MSCI World equity index covering 46 markets held near its two-month high touched on Thursday.
The rally was led by emerging markets, with a measure of emerging-markets shares .MSCIEF rising 0.4 percent on Friday for a sixth day of gains, its longest winning streak since October.
The biggest move on Thursday came from Brazil's Bovespa index .BVSP, which rose more than 5 percent, its biggest gain in six years, on news that President Dilma Rousseff could be implicated in a sweeping corruption scandal.
That encouraged investors who blame her administration's policies for driving Brazil into deep recession.
On Wall Street, the S&P 500 Index .SPX rose 0.35 percent to a two-month high of 1,993.4.
U.S. data on Thursday was positive on the whole, with factory orders rising and the service sector index showing continued expansion.
Somewhat dimming the optimism, however, the services survey showed employment in the sector fell in February for the first time in two years.
But that was not necessarily bad for U.S. stocks, as it helped to reduce expectations for a Fed rate hike this month, and pushed the dollar lower.
The dollar's index against a basket of six major currencies .DXY =USD slipped 0.6 percent on Thursday. It held steady at 97.636 on Friday.
The dollar's weakness also helped China's yuan strengthen for a fourth day, while suspected intervention by the central bank also lent support.
The People's Bank of China set the midpoint rate CNY=SAEC at 6.5284 per dollar prior to market open, 0.20 percent firmer than the previous fix.
Spot yuan CNY=CFXS opened at 6.5280 per dollar. It hit an intraday high of 6.5099 around 11:30 a.m. local time (0330 GMT), apparently supported by state-bank dollar sales, before trimming gains to 6.5234.
The dollar's weakness also helped push gold XAU= to a 13-month high of $1,268.30 per ounce on Thursday. The precious metal was last trading at 1,261.20.
The euro EUR= jumped back to $1.0953 from Wednesday's one-month low of $1.08255.
The yen JPY= traded at 113.83 to the dollar, recovering from Wednesday's two-week low of 114.56.
The Australian dollar AUD=D4 stood at $0.7367, holding near a three-month high of $0.7374 hit on Thursday, helped by rising iron ore prices. It's on track for a weekly gain of 3.3 percent, the most in five months.
Spot iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI hit a 4-1/2-month high on Thursday.
Commodity prices have been on the mend, with oil recovering more than 30 percent from January's 12-year lows, most recently helped by data showing U.S. oil production fell to its lowest since November 2014.
Brent futures touched a two-month high of $37.40 per barrel on Wednesday. They were back up to that level on Friday, heading for a gain of 6.6 percent this week.
U.S. crude futures have risen 6.4 percent this week to $34.87.
(Reporting by Hideyuki Sano; Editing by Kim Coghill and Richard Borsuk)