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A woman stands in front of an electronic board showing stock information at a brokerage house in Shanghai March 5, 2009. REUTERS/Aly Song

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By Nick Macfie

SINGAPORE (Reuters) – Asian shares surged on Friday after encouraging U.S. retail sales and jobs data suggested Asia’s biggest export market was stabilizing, while the euro remained on the defensive amid the Greece debt crisis.

Investors now have their sights firmly set on the monthly U.S. report on non-farm payrolls, due out later on Friday, the most closely watched figures on the U.S. labor market.

Japan’s benchmark Nikkei average (Osaka:^N225 – News) closed up 2.2 percent at 10,368.96, while the broader Topix (^TOPX – News) gained 1.47 percent.

The MSCI index of Asian shares outside Japan (^MIAPJ0000PUS – News) was up 0.83 percent.

Also boosting share sentiment in Tokyo, the Nikkei newspaper said that the Bank of Japan was examining a further easing of its already ultra-loose monetary policy and may make a decision on such a move as early as this month.

“In addition to a solid performance from the U.S. stocks, investors are welcoming a halt in the yen’s advance against the dollar after a media report that the BOJ is considering additional easing measures,” said Mitsuo Shimizu, deputy general manager at Cosmo Securities.

The dollar rose 0.2 percent against the yen to 89.23 as investors grew cautious about selling the U.S. currency too far, worried that views on U.S. payroll numbers due later in the day may have been too pessimistic. The dollar index (^DXY – News) was steady at 80.52.

“If dollar/yen climbs back above 90 yen, the Nikkei could break out of range-bound trade, with the next target likely being around 10,500,” Shimizu said,

The euro remained on the defensive as a short squeeze in the single currency appeared to have run its course, with investors fretting about debt-laden Greece and Moody’s cutting Deutsche Bank’s ratings.

The euro stood at $1.3592, edging up 0.1 percent. It recovered from its 0.8 percent loss the day before when it moved in choppy trade following a robust response to a Greek debt auction.

The euro gained 0.3 percent against the yen and the Australian dollar rose 0.1 percent to 80.30 yen.

The single currency has lost nearly 10 percent since November last year when sovereign debt problems surrounding Greece and other peripheral euro zone economies emerged.

U.S. stocks rose on Thursday on the stronger-than-expected retail sales and a fall in first-time jobless claims. The Dow Jones industrial average (DJI:^DJI – News) closed up 47.38 points, or 0.46 percent.

February’s monthly sales performance among U.S. retailers was the strongest since just before the recession started in 2007. The United States reported that first-time claims for jobless benefits fell by 29,000 to a seasonally adjusted 469,000 in the latest week.

The non-farm payrolls report, due at 1330 GMT, is expected to show a loss of 50,000 jobs in February, compared with 20,000 job cuts in January, a Reuters poll shows.

“Greece worries continue and with investors still cautious about risk, I would have a bias toward the U.S. dollar ahead of the payrolls data,” said Jonathan Cavenagh, currency strategist at Westpac.

Spot gold traded at $1,134.10 an ounce, up from New York’s close. Volume was thin ahead of the U.S. payrolls data with key resistance seen at a January high of around $1,150.

“We don’t know where to head to,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. “…Overall, people are still expecting further rises in gold.”

Crude edged higher, capping two consecutive weeks of trading above $80, after China signaled it would maintain its economic stimulus, rekindling hopes for accelerating growth to drain excess oil supplies.

(Additional reporting by Anirban Nag in Sydney, Daniel Bases in New York, Lewa Pardomuan in Singapore and Aiko Hayashi in Tokyo; Editing by Tomasz Janowski)