TOKYO: Asian shares edged higher on Monday, buoyed by US data which maintained expectations for a mild recovery and continued loose Federal Reserve monetary policy to support it, bolstered by solid manufacturing data from Europe and China.
The yen hit its lowest since August 2008 against the Australian and New Zealand dollars early on Monday and stuck near lows against the euro and the US dollar and confidence of bold monetary support to overcome Japan's stubborn deflation.
The MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent after posting a weekly gain of 0.7 per cent.
"Asian shares are likely to take the cues from the rise in US equities and prices of risk assets are generally expected to face upward pressures," said Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory.
The Dow Jones industrial average rose to 14,000 for the first time since October 2007 and the Standard & Poor's 500 Index hit its highest point since December of that year.
US data showed on Friday payrolls rose by 157,000 last month, with upward revisions for November and December, while the Institute for Supply Management said its index of national factory activity rose to its highest since April.
China followed with positive news over the weekend, saying growth in its official purchasing managers' index (PMI) for the non-manufacturing sector ticked up in January for the fourth straight monthly rise, confirming the world's second-largest economy was showing a modest recovery.
Resources-reliant Australian shares edged up 0.2 per cent, after jumping 0.9 per cent to a 21-month high on Friday. Positive economic news from China, Australia's largest export destination, usually boosts Australian investor sentiment.
South Korean shares opened up 0.6 per cent.
Japan's benchmark Nikkei stock average opened 0.6 per cent higher, climbing to a fresh 33-month high as the yen declined. The index logged its 12th straight week of increases last week, the longest run of weekly gains since 1959.
The dollar steadied at 92.83 yen after scaling its highest since May 2010 of 92.97 on Friday, while the euro was up 0.1 per cent to 126.71 yen, near its loftiest since April 2010 of 126.97 touched on Friday.
In early Monday trade, the yen plunged to its lowest since August 2008 against both the Australian dollar, at 96.78 yen , and against the New Zealand dollar at 78.74 yen .
The euro inched 0.1 per cent higher to $1.3649, off Friday's 14-1/2-month peak of $1.3711 hit after data showed euro zone factories had their best month in January in nearly a year.
On Friday, the dollar index measured against a basket of key currencies fell to a 4-1/2-month low of 78.918.
"It is well understood that the EUR has been boosted by the perception of reduced financial stability risks in the euro area and the resulting rebalancing moves out of the CHF, JPY and GBP. As a result, strong trends are in place in EUR/GBP, EUR/USD and EUR/JPY," Barclays Capital said in a research note. "The US economy has maintained its momentum, but not so much as to alter our view that the Fed will remain accommodative."
As economic optimism rose and concerns about the euro zone's debt difficulties eased, investors took on more risk.
Research provider TrimTabs Investment Research said on Saturday investors poured a record $77.4 billion in new cash into stock mutual funds and exchange-traded funds in January, surpassing the previous monthly record of $53.7 billion in February 2000.
In the oil market, tension across the Middle East put Brent crude on track to its biggest weekly gain since mid-November, and US crude rose for an eighth straight week, although it eased 0.3 per cent to $97.53 a barrel early on Monday.