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Hong Kong - Asian shares bounced off early lows on Friday but remained on track for their third straight weekly loss, while the dollar rose ahead of US jobs data that could spur the Federal Reserve to raise interest rates in September.
Financial spreadbetters expect Britain's FTSE 100 to open 4 points higher, Germany's DAX to open up 0.1%, and France's CAC 40 to open flat.
Prospects of higher US rates have sucked funds out of emerging markets, with a recent slump in Chinese stocks and a rout in commodities also affecting investor demand.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2% and off about 1.5% for the week, weighed down by weak US equities in the wake of disappointing earnings reports.
Japan's Nikkei stock index was up 0.2%, erasing earlier losses from investors taking profits after the Bank of Japan kept its stimulus programme unchanged.
Investors had expected the BOJ to keep its policy unchanged. The central bank maintained its conviction that inflation will hit its 2% target without additional monetary stimulus.
Upbeat US economic data and hawkish comments by a Fed official this week have supported the case for policy tightening and put pressure on emerging markets, with Friday's payrolls data expected to play a crucial role in the Fed's decision.
Economists expect the US employment report to show that 223 000 jobs were created in July. On Thursday, US jobless claims rose from the previous week, though the positive trend was intact.
READ: US jobless claims edge up, labour market strong
"Today's report on the US labour market is likely to be of even greater than usual interest because of the Fed's 'data dependent' approach to policy in what remains of 2015," strategists at Barclays said.
The MSCI world index has advanced 3% this year, while the MSCI emerging markets index has fallen more than 6.5%, as investors have switched their holdings.
In currencies, the dollar index stood at 97.86, on track for a second straight weekly gain, as investors focused on the emerging policy divergence between the Fed and other major dovish central banks such as Japan and England.
The dollar edged higher on the day at ¥124.78 after the BOJ policy announcements while the euro edged slightly higher to $1.0914.
READ: Dollar ticks up ahead of US jobs data
Sterling was not far from overnight lows hit after the Bank of England sent a dovish message, with only one member voting for an immediate rate hike versus expectations for at least twomembers. The pound was flat at $1.5511, after falling as low as $1.5465.
In bond markets, US Treasuries were broadly stable as dealers squared positions before the economic data with benchmark 10-year notes yielding 2.24%. Japanese 10-year bonds were trading on top of the day's ranges at 0.43%.
In commodities trading, US crude futures edged up after dropping to multi-month lows overnight after a large drop in US crude inventories failed to boost prices.
US crude was up about 0.6% at $44.92 after skidding as low as $44.20 on Thursday, not far from the six-year low of $42.05 hit in March. Brent rose 0.6% to $49.81 a barrel, pulling away from Thursday's six-month low
The 19-commodity Thomson Reuters/Core Commodity CRB Index plumbed fresh lows not seen since 2003 with a year-to-date decline of nearly 14%.
