(Reuters) - Asian stocks advanced for a second consecutive day on Friday as market players scooped up bargains after recent drops while the euro pushed higher, though the currency's gains may be limited for now.
Even as the euro enjoyed a brief respite versus the U.S. dollar due to thinning yield differentials, it plumbed to a record low against the Swiss franc in a sign that traders remain cautious on how the Greek situation will play out.
While markets have been under pressure in recent weeks due to a steady stream of bad news from the euro zone, Asian stocks and bonds have held up fairly well as recent data prints and positioning comforted investors on the region's growth outlook.
Korea .KS11 led gains in regional indices as foreign investors trooped back, snapping a long selling streak. Solid current account surplus numbers in April too played its part.
"The market is firming its position at the current level, and we are seeing a stronger bounce in sectors with a more positive outlook," said Lee Sun-yeb, a market analyst at Shinhan Investment Corp.
Elsewhere, Australian shares .AXJO reversed early losses to trade higher on the day while Hong Kong shares .HSI rose, supported by gains in Petrochina (0857.HK).
Stocks outside Japan .MIAPJ0000PUS rose more than 1 percent on Friday even though the index is set for a fifth consecutive week of losses -- its longest string of losses since October 2008.
While concerns of a Greek restructuring kept investors cautious about adding big positions in stocks, they had no such qualms toward fixed-income assets as Asian policymakers showed no signs in letting up in their battle to fight inflation.
Latest data from Thomson Reuters Lipper showed net inflows of $94 million into high yield funds and a $1 billion inflow into corporate investment grade funds in the week of May 25.
DESPERATELY SEEKING CONFIDENCE
In currency markets, the euro turned higher after its drop this week stalled right near its 100-day moving average and also the bottom of the cloud on daily Ichimoku charts, a form of Japanese technical analysis popular among market players.
Still, it is expected to stay within recent trading ranges until confidence is restored on the Greek debt crisis and the market refocuses on the outlook for euro zone interest rates, which would be supportive for the single currency, Brown Brothers Harriman strategists said in a note.
For now though, the double whammy of weak U.S. economic data and falling U.S. Treasury yields offered support to the euro.
In another sign that the U.S. economy has hit a soft patch, jobless claims for last week unexpectedly rose while annual GDP growth came in lower than analysts had expected.
The weak data took the wind out of commodity markets, particularly oil, which dropped more than 1 percent overnight, but recovered to hold above the $100 per barrel line.
In bond markets, U.S. Treasuries rallied and benchmark yields fell to new six-month lows with ten-year note yields breaking below their 200-day moving average. They were last at 3.07 percent, their lowest level since early December.
Other safe-haven assets like gold and silver received a boost from the Greece situation. Silver recovered after falling in the previous session while gold inched higher.
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