Asian shares on track for weekly gain

TOKYO (Reuters) - Asian shares advanced near recent highs on Friday and were on track for weekly gains, with some investors betting the lustre would rub off on European stock markets.

Financial spreadbetters expected Britain's FTSE 100 <.FTSE> to open 15 to 17 points higher, or up 0.2 percent; Germany's DAX <.GDAXI> to open 37 to 40 points higher, or up 0.3 percent; and France's CAC 40 <.FCHI> to open 14 to 15 points higher, or up 0.3 percent.

"We look set for a strong finish to the week for European markets with further declines in European yields and the euro acting as the catalyst for new multi-year highs this week," Michael Hewson, chief market analyst at CMC Markets, said in a note.

News that Greece had made a 450 million euro loan payment to the International Monetary Fund, securing extra emergency lending for its banks and helped improve global risk sentiment, despite scepticism over how far Athens' economic reforms would go.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was up about 0.4 percent, not far from the previous session's peak which was the highest since September, and on track for a robust weekly gain of over 3 percent.

Hong Kong's benchmark Hang Seng Index <.HSI> was up about 0.3 percent after surging to seven-year highs in the previous session on money inflows from mainland China investors who are seeking cheaper shares. The Shanghai Composite Index <.SSEC> added 1.7 percent.

Foreign-currency denominated B-shares trading in Shanghai and Shenzhen also rallied. Shanghai's dollar-denominated B-share index <.SSEB> rocketed 9 percent to a seven-year high in its largest one-day rally since 2009, with every index component rising by 10 percent, the maximum daily limit.

Japan's Nikkei stock average <.N225> ended down 0.2 percent on profit-taking after earlier breaking above the 20,000 level for the first time since April 2000. It logged a 2.4 percent gain for the week.

Markets showed little reaction to China's consumer inflation, which stayed flat at 1.4 percent in March while producer prices fell slightly less than projected. That will keep pressure on profit margins at Chinese companies as Beijing struggles to stimulate growth.

"Overall, the Chinese economy is still facing serious downward pressure without any substantial improvement, and the deflationary risk is still there," said Yu Pingkang, chief economist at Hutai Securities in Shenzhen, adding that the central bank should roll out more monetary easing measures to lower real financing costs and boost growth.

Wall Street posted solid gains overnight, and European markets ended higher after German industrial output and trade data showed the continent's largest economy improving in February. Europe's EuroFirst 300 index <.FTEU3> surged 1.1 percent to its highest level since July 2007.

U.S. Treasury yields rose on Thursday on the Greek news, weak demand at a sale of 30-year bonds, and a smaller-than-expected rise in weekly jobless claims that alleviated some concern about the U.S. labour market after last week's dismal March nonfarm payrolls report.

The U.S. Labor Department said workers filing for first-time jobless benefits totalled 281,000 last week, fewer than what analysts had forecast, and bringing the four-week average of claims to its lowest since 2000.

The yield on the benchmark 10-year Treasury note stood at 1.952 percent in Asian trade, compared to its U.S. close of 1.958 percent on Thursday.

The dollar index <.DXY>, which tracks the greenback against a basket of six major rivals, stood at 99.020, down about 0.1 percent on the day and still shy of its 12-year peak of 100.390 set last month.

Against the yen, the dollar climbed to a three-week high of 120.74 overnight, moving well away from its post-payrolls low of 118.71 yen a week ago. It was last at 120.50 yen, down slightly on the day.

The euro edged up on the day to $1.0661 after dipping to a three-week low of $1.0637 on Thursday. For the week, the euro is down more than 2 percent.

"It's hard to avoid the conclusion that carry trades are playing a part. Note that German bond yields out to 8 years are now in negative territory, the euro is very much a funding currency," said David de Garis, senior economist at NAB.

Brent crude oil futures remained firm after rising on Thursday on strong German economic data and uncertainty about negotiations on Iran's nuclear program.

Brent added about 0.2 percent to $56.69 a barrel. But U.S. crude slipped 0.3 percent on the day to $50.65.

(Additional reporting by China economics team and Masayuki Kitano in Singapore; Editing by Shri Navaratnam, Kim Coghill and Simon Cameron-Moore)