* Tech, resource stocks lead regional shares higher
* Bond investors focus on results of 10-year JGB auction
* How stable is the U.S. recovery?
By Kevin Plumberg
HONG KONG, July 2 (Reuters) - Asian stocks were largely
unchanged on Thursday ahead of the latest U.S. payrolls report,
while the U.S. dollar remained near a three-week low against
the euro, sensitive to lingering doubts about its reserve
status.
The U.S. unemployment rate is forecast to rise to a 26-year
high of 9.6 percent, which would test even the most die hard
bulls on the extent of the recovery underway even after
Wednesday's positive manufacturing figures from China, the euro
zone and the United States.
"Manufacturing data from the United States and other major
economies came out quite solid, but investors remain cautious
ahead of U.S. jobs data and corporate earnings," said Yoo
Soo-min, a market analyst at Hyundai Securities in Seoul.
Japanese government bond futures slipped, with investors
focused on the results of a 2.1 trillion yen ($21.7 billion)
auction of 10-year bonds meant to help Tokyo finance stimulus
spending. The level of market demand for the bonds will be key
in judging how expensive borrowing will be for the government.
Crude prices edged up toward $70 a barrel, with a reported
increase in U.S. gasoline inventories ahead of the summer
driving season not able to keep oil down for long.
Japan's Nikkei share average <> was flat on the day
but far from an eight-month high reached three weeks ago.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> rose 1 percent, with strength concentrated in
the technology and materials sectors.
Stocks in Taiwan rose 1.4 percent, outpacing the region as
investors eager to gain exposure to Chinese economic growth
prospects pushed the benchmark TAIEX index <> to a fresh
one-month high.
Valuations of technology firms in Taiwan, on a 12-month
forward price-to-earnings basis, have been coming down in the
last few months and are currently around 23 times compared with
50 times in April, according to global estimates tracker
I/B/E/S.
That has opened up entry points for investors in stocks
such as mobile phone chipmaker Mediatek <2454.TW>, which was up
2.4 percent.
The U.S. dollar made up some lost ground against major
currencies after it fell on Wednesday on news China was seeking
debate on proposals for a new global reserve currency at next
week's Group of Eight meeting. []
However, dealers were cautious about taking big positions
ahead of the June U.S. employment report that is expected to
show payrolls fell 363,000.
U.S. private employers slashed a bigger-than-expected
473,000 jobs in June, according to a report from ADP Employers
Services on Wednesday, making the market wary that the
government's data may show more losses than forecast.
"The ADP number was worse than expected so now there might
be some downside risk in payrolls which makes it harder to take
large positions," said Yuki Sakasai, currency strategist at
Barclays Bank Tokyo.
The euro was trading nearly unchanged on the day at $1.4134
<EUR=>, having carved out a $1.4340 to $1.3750 range since
hitting a high for the year on June 3.
The Australian dollar was down 0.3 percent to US$0.8065
<AUD=>, weighed down after trade data showed a much
larger-than-expected shortfall of AU$556 million.
The 10-year Japanese government bond futures contract
<2JGBv1> fell 0.15 point ahead of auction results at 0345 GMT.
The end of the first half of the year saw heavy buying of
JGBs, especially late maturities, narrowing the difference
between the 10-year yield and the 2-year yield by 14 basis
points in the last month.
The yield on the benchmark U.S. 10-year Treasury note was
at 3.55 percent <US10YT=RR>, roughly where it was at the end of
New York's trading day on Wednesday.
U.S. light crude for August delivery <CLc1> rose 0.4
percent to $69.58 a barrel, within sight of Tuesday's
eight-month high of $73.38 a barrel.
(Additional reporting by Charlotte Cooper in TOKYO and
Jungyoun Park in SEOUL)
