Tokyo - Asian shares crept up on Monday with soft Chinese data overshadowed by expectations for fresh stimulus from the Federal Reserve and for Europe to make progress in tackling its debt crisis.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2% after adding as much as 0.5% to a two-week high.
"What we're seeing is relief after things have been bad for so long," said Larry Jiang, chief investment strategist at Guotai Junan in Hong Kong.
In Jiang's view, Europe "is looking more stable at least for the moment" while news late last week about China infrastructure projects "is helping although no one is asking where the money will come from."
Japan's Nikkei average underperformed, inching down 0.1% as a firmer yen weighed on exporters.
European equities were seen flat to lower, with a 0.4% drop in US stock futures suggesting a weak Wall Street start. Financial spreadbetters called London's FTSE 100 , Paris's CAC-40 and Frankfurt's DAX to open flat to as much as 0.3% lower.
China's exports grew at a slower pace than forecast last month while imports surprisingly fell, underlining weak domestic demand as the global economic outlook dims.
It followed news over the weekend showing Chinese industrial output slowed in August while fixed asset investment grew strongly, underscoring the importance of infrastructure spending to economic growth.
Rising consumer inflation, however, suggested the scope for easier monetary stimulus may be narrowing.
Shanghai copper jumped 2.6% to hit a four-month high at 58,130 yuan, boosted by global stimulus hopes and China's approval of a multi-billion dollar infrastructure drive.
Local media also reported on Sunday that China will provide subsidies worth $2.2bn to buyers of energy-efficient computers and air-conditioners.
"Economic fundamentals are sluggish but concerns about weak demand from China are outweighed by expectations that bad data would spur further monetary easing and other stimulus steps to bolster growth, supporting commodities generally," said Hiroyuki Kikukawa, general manager at trading company Nihon Unicom.
US crude futures were off 0.1% at $96.32 a barrel but Brent was up 0.2% to $114.51.
No consensus on QE3
US nonfarm payrolls grew far less than forecast in August and the jobless rate fell largely due to a drop in the participation rate.
The data increased bets that the Fed will embark on a third round of bond buying or quantitative easing (QE3) at its September 12-13 meeting. But experts remained split over whether the Fed would see the job growth as sufficiently sluggish to spur QE3.
"We believe extended rate guidance is almost a given, while QE3 is a ... coin toss," Morgan Stanley analysts said in a note.
Amber Rabinov at ANZ Research said the Fed would at least extend its forward guidance on rates, referring to the period the Fed has committed to keep rates near zero, which currently stands at least through late 2014.
The dollar index stayed near its four-month lows and the dollar traded at ¥78.22, not far from the five-week trough of ¥78.02 plumbed on Friday.
Spot gold was up 0.1% to $1 736.94 an ounce, nearing Friday's peak of $1 741.30, its highest since February 29.
Money managers, including hedge funds and other large speculators, raised their bullish bets in gold and silver to their largest holding since March on easing expectations.
Improved investor sentiment kept Asian credit markets steady, with the spread on the iTraxx Asia ex-Japan investment-grade index pinned near its tightest in six months.
Eventful week for Europe
The euro eased 0.2% to $1.2787, off a four-month high of $1.2815 touched on Friday.
"You might get an acceleration if we do get QE3," said Andrew Robinson, FX analyst for Saxo Capital Markets in Singapore, referring to the euro's outlook.
Markets surged broadly on the European Central Bank's announcement last week to launch a new and potentially unlimited bond-buying programme, focused on short-dated bonds in countries implementing approved fiscal austerity measures.
The International Monetary Fund and European Commissioner for Economic and Monetary Affairs Olli Rehn threw their support behind the scheme while ECB executive board member Benoit Coeure said countries that apply for the bond-buying scheme will not necessarily be asked to make more cuts.
Key events for Europe this week include a Wednesday ruling by Germany's constitutional court on the new eurozone bailout fund. Financial market prices suggest investors expect the court to back the fund, which would pave the way for aiding countries faced with high borrowing costs such as Spain.
Madrid intends to discuss conditions attached to the ECB's bond-buying plan with eurozone finance ministers this week. European Union finance ministers will meet on Friday and Saturday.
Global lenders, returning to Athens to assess Greece's austerity reforms before granting its latest bailout crucial to keeping the country afloat, have rejected parts of a nearly €12bn package prepared by the government.
"The big risk is Greece, but the outcome is pushed back. For now, risk sentiment should be generally supported," said a currency analyst at a foreign securities firm in Tokyo.
*Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.