SINGAPORE – Asian stocks extended a global rally Thursday amid investor optimism that the U.S. economy may grow more than previously expected this year.

Tokyo’s Nikkei 225 rose 0.8 percent to 8,881.27 while Hong Kong’s Hang Seng gained 1.2 percent to 20,585.44 and Seoul’s Kospi added 1.4 percent to 1,985.82.

Signs of an improving U.S. economy have helped bolster trader sentiment. Factories raised output in January by the most in seven months, according to the Institute for Supply Management’s manufacturing index on Wednesday. And the Commerce Department said construction spending rose 1.5 percent in December, the fifth straight monthly gain.

Investors have also been cheered by growing optimism that contagion from a likely Greek debt default can be contained.

Global equities are advancing “on hopes of the global economy gaining a solid footing and the banking sector continued to rally on the belief that Europe will avoid a catastrophe,” IG Capital in Melbourne said in a report.

On Wednesday, the Dow Jones industrial average closed up 0.7 percent at 12,716.46. The S&P added 0.9 percent to 1,324.09 while the Nasdaq composite index rose 1.2 percent to close at 2,848.27.

European stock indexes also rose Wednesday. France’s CAC-40 gained 2.1 percent while Britain’s FTSE 100 rose 1.9 percent and Germany’s DAX jumped 2.4 percent.

China’s benchmark Shanghai Composite Index climbed 0.2 percent to 2,272.99 on Thursday amid signs manufacturing improved in January for a second straight month.

Shares in Singapore, Australia, Taiwan and New Zealand all gained ground.

“After stepping into a soft patch in the fourth quarter, Asian economic growth is gradually picking up,” said Frederic Neumann, co-head of Asian economics at HSBC in Hong Kong. “This rebound is led by the region’s giants: China, India, and Japan.”

Early Thursday, the Tokyo Stock Exchange suspended trading in 241 securities, including Sony Corp. and Hitachi Ltd., due to a glitch in its electronic trading system. Trading in the suspended securities was to resume midday.

Benchmark oil for March delivery rose 6 cents to $97.67 per barrel Thursday in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to settle at $97.61 on Wednesday.

In currencies, the euro rose to $1.3193 from $1.3158 late Wednesday in New York. The dollar slipped to 76.12 yen from 76.15 yen.

SHANGHAI – Asian stocks mixed Wednesday, as a modest improvement in manufacturing data from China offered reassurance over its economic slowdown.

Benchmark oil hovered below $99 per barrel while the dollar rose against the euro and was steady against the yen.

A better-than-expected manufacturing index for January, issued by a government federation, fueled an early rally in most markets across the region. But much of the advance was lost after the later release of a competing, seasonally adjusted survey by HSBC that indicated conditions were still deteriorating.

Tokyo’s Nikkei 225 edged up less than 0.1 percent to close at 8,809.79. Hong Kong’s Hang Seng was down 0.4 percent to 20,314.21 while Seoul’s Kospi added 0.2 percent to 1,959.24.

By afternoon, shares in mainland China had retreated back into negative territory, with the benchmark Shanghai Composite Index shedding 1.2 percent to 2,265.49.

An unexpected drop in U.S. consumer confidence dragged stocks down overnight on Wall Street, where the Dow Jones industrial average lost 20.81 points, or 0.2 percent, to 12,632.91. The S&P slipped 0.60 point to 1,312.41 while the Nasdaq composite index rose 1.90 points to close at 2,813.84.

Overall, though, U.S. shares had their best start in 15 years, thanks to a modest improvement in the economy. Sentiment was further buoyed by hopes of progress in Europe after leaders there agreed on the broad outlines of a deal to tie the countries that use the euro closer together and on hopes that Greece is close to a debt-reduction deal with private creditors.

Yet, the mixed signals from China compounded uncertainties still weighing on investor confidence. That is true especially for Australia, whose economy depends heavily on Chinese demand for its coal and other commodities.

Australia’s S&P/ASX 200 fell 0.9 percent to 4,225.70 while India’s Sensex dropped 0.7 percent to 17,079.29.

Singapore shares also were lower, while Taiwan, Indonesia and New Zealand gained ground.

Benchmark oil for March delivery gained 15 cents to $98.63 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 30 cents to end at $98.48 per barrel in New York on Tuesday.

In currencies, the euro fell to $1.3038 from $1.3084 late Tuesday in New York. The dollar was nearly unchanged at 76.21 yen.

SHANGHAI – Asian stocks were mostly higher Wednesday despite a lackluster day on Wall Street, as improved manufacturing data from China offered reassurance over its economic slowdown.

Tokyo’s Nikkei 225 rose 0.3 percent to 8,826.79, helped by news of rebounding industrial production and household spending. Hong Kong’s Hang Seng gained 0.2 percent to 20,424.24 and Seoul’s Kospi added 0.3 percent, to 1,961.77.

An unexpected drop in U.S. consumer confidence dragged stocks down on Wall Street, where the Dow Jones industrial average finished down 20.81 points, or 0.2 percent, at 12,632.91. The S&P slipped 0.60 point to 1,312.41 while the Nasdaq composite index rose 1.90 points to close at 2,813.84.

But overall the U.S. markets had their best start for stocks in 15 years, thanks to a modest improvement in the economy. Sentiment was further buoyed by hopes of progress in Europe after leaders there agreed on the broad outlines of a deal to tie the countries that use the euro closer together and on hopes that Greece is close to a debt-reduction deal with private creditors.

China’s benchmark Shanghai Composite Index climbed 0.1 percent to 2,294.67 following the release of a key manufacturing index that showed conditions improving in January for a second straight month, though only by a modest margin.

Peng Yunliang, an analyst based in Shanghai, said strong demand for food and beverages kept manufacturing demand better than expected.

“I expect the market will keep on rising in the short term,” he said.

Shares in Singapore and Australia weakened, while Taiwan, Indonesia and New Zealand gained ground.

European markets rebounded Tuesday amid hopes for progress on handling Greece’s debt. Under a tentative agreement, investors holding 206 billion euros ($272 billion) in Greek bonds would exchange them for bonds with half the face value. The replacement bonds would have a longer maturity and pay a lower interest rate. When the bonds mature, Greece would have to pay its bondholders only 103 billion euros.

France’s CAC-40 gained 1 percent while Britain’s FTSE 100 and Germany’s DAX both gained 0.2 percent.

Benchmark oil for March delivery gained 31 cents to $98.79 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 30 cents to end at $98.48 per barrel in New York on Tuesday.

In currencies, the euro fell to $1.3064 from $1.3084 late Tuesday in New York. The dollar fell to 76.15 yen from 76.20 yen.

BEIJING – Asian stocks were mostly higher Tuesday as traders watched for a possible deal to cut Greece’s debts and Japanese factory output rebounded.

Tokyo’s Nikkei 225 rose 0.3 percent to 8,817.9 after data showed December industrial activity rose 4 percent over the previous month. Hong Kong’s Hang Seng gained 0.7 percent to 20,303.9 and Seoul’s Kospi was up 0.8 percent at 1,955.2.

Traders watched Europe, a major export market, following reports Greece and its creditors were close to a deal to cut its debts. Also Monday, European leaders agreed on a new treaty meant to stop overspending and put an end to the region’s crippling debt woes.

“Everyone is watching the European summit and how the Greek debt crisis comes out,” said Jackson Wong at Tanrich Securities in Hong Kong. “The general atmosphere is to play a wait-and-see game.”

China’s benchmark Shanghai Composite Index was flat at 2,281.4 ahead of Wednesday’s release of a key manufacturing index. Investors are hoping for a loosening of credit curbs or other measures to boost growth if it shows activity is slowing amid lackluster global demand for Chinese goods.

Benchmarks in Taiwan and Indonesia rose while Singapore, Malaysia and New Zealand fell.

European markets tumbled Monday on concerns Greece’s financial problems might not be solved even if creditors agree to cancel part of its debt.

Under a tentative agreement, investors holding 206 billion euros ($272 billion) in Greek bonds would exchange them for bonds with half the face value. The replacement bonds would have a longer maturity and pay a lower interest rate. When the bonds mature, Greece would have to pay its bondholders only 103 billion euros.

France’s CAC-40 shed 1.6 percent while Britain’s FTSE 100 and Germany’s DAX both lost 1 percent.

Wall Street fell in early trading but Asian investors were encouraged after the Dow Jones industrial average recovered most of its losses to close down just 0.1 percent. The Standard & Poor’s 500 lost 0.8 percent.

Borrowing costs for European countries with the heaviest debt burdens shot higher. The two-year interest rate for Portugal’s government debt jumped to 21 percent after trading around 14 percent last week.

Portugal may become the next country “where default is a real possibility,” said Martin Hennecke of Tyche Group in Hong Kong.

“The euro zone crisis is far from being fixed at all. Italy and Spain are effectively bankrupt as well,” Hennecke said. “For Asia, that means there is huge uncertainty in terms of export markets.”

The treaty agreed to Monday by all European Union governments except Britain and the Czech Republic includes strict debt brakes and is aimed at making it harder for violators to escape sanctions. The 17 countries in the eurozone hope the tighter rules will restore confidence in their joint currency.

The agreement comes as richer countries such as Germany are losing patience with giving Athens loans, saying the Greek government is not carrying out reforms and spending cuts fast enough. A German official proposed having an EU monitor oversee Greek spending but that idea was quickly rejected at Monday’s meeting in Brussels.

Benchmark oil for March delivery gained 37 cents to $99.39 per barrel in electronic trading on the New York Mercantile Exchange.

In currencies, the euro rose to $1.319 from $1.3114 late Monday in New York. The dollar held steady at 76.25 yen.

BANGKOK – Asian stock markets mostly rose Tuesday, shrugging off tough negotiations between Greece and its creditors amid expectations a deal to cut the country’s debt mountain will ultimately be reached.

Trading in the region was subdued due to Chinese New Year holidays. Markets in Hong Kong, mainland China, South Korea, Taiwan, Singapore, Malaysia and Vietnam are closed Tuesday.

Japan’s Nikkei 225 stock average was up 0.4 percent at 8,798.25 and Australia’s S&P/ASX 200 added 0.3 percent to 4,237.20. Indonesia’s benchmark climbed 0.7 percent to 4,014.37. New Zealand’s index fell 0.5 percent to 3,278.00.

Hopes that Greece will reach a deal with private creditors on lowering its debt — despite a delay in talks between Athens and banks’ representatives — supported European markets on Monday and sent the euro up to three-week highs above $1.30.

The deal being thrashed out would see private creditors swapping their old Greek bonds for ones with a 50 percent lower face value. The new bonds would also have much longer maturities, pushing repayments decades into the future, and a much lower interest rate than Greece would currently have to pay on the market.

Issues over the interest rates on the bonds lie behind the delay. However, the Greek government and representatives for the private creditors insist that the talks have not broken down and that they are moving closer to a final deal.

French Finance Minister Francois Baroin said a deal “seems to be emerging” after meeting with his German counterpart Wolfgang Schaeuble ahead of the eurozone finance ministers’ meeting in Brussels on Monday.

An agreement is necessary if Greece is to get the next batch of bailout cash that would prevent a devastating debt default. Greece does not have enough money to cover a euro14.5 billion ($18.7 billion) bond repayment in March. A deal would allow the country to receive a second bailout package from other European governments and the IMF, and cut Greece’s debt from an estimated 160 percent of its annual economic output to 120 percent by 2020.

On Wall Street, the S&P 500 index eked out a tiny gain while traders kept an eye on talks in Europe to cut Greece’s crushing debt load and prevent a global financial crisis. Other indexes ended slightly lower.

Benchmark crude was up 1 cent at $99.59 a barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $1.25 to end Monday at $99.58 after Iran again threatened to block shipments of crude from the Persian Gulf. The latest threat followed a widely expected decision by the European Union to embargo imports of Iranian oil.

In currencies, the euro was down 0.2 percent at $1.2996 after jumping the day before. The dollar rose 0.1 percent to 77 yen.

BANGKOK – Asian stocks posted muted gains Monday in trade thinned by Chinese New Year holidays as talks on a debt agreement for Greece dragged on.

Only a handful of markets were open for business. Trading is closed in mainland China, Hong Kong, Taiwan, Indonesia, Singapore, Malaysia, the Philippines and South Korea.

Japan’s Nikkei 225 stock average was up 0.2 percent at 8,779.16 while Australia’s S&P/ASX 200 slipped 0.3 percent to 4,228.10. New Zealand’s benchmark added 0.1 percent to 3,279.19.

On Friday, stocks in Europe mostly held their gains for the week, waiting for the outcome of Greece’s negotiations with its creditors on a deal to cut the face value of up to euro200 billion ($258 billion) in debt by 50 percent.

Over the weekend, the representative of Greece’s private creditors said the talks are continuing even after his unexpected departure from the country.

A deal in Athens would allow the country to receive a second bailout package from other European governments and the International Monetary Fund, and cut Greece’s debt from an estimated 160 percent of its annual economic output to 120 percent by 2020.

That is still painfully high, but without the help, Greece will not be able to pay euro14.5 billion in debt due March 20. A Greek default would send borrowing costs higher across Europe and could trigger chaos in the global financial system.

On Wall Street on Friday the Dow rose 96.50 points to close at 12,720.48. The S&P 500 index inched up 0.88 to 1,315.38 and the Nasdaq gained 1.63 points to 2,786.70.

In energy trading, benchmark crude was down 41 cents at $97.92 a barrel in electronic trading on the New York Mercantile Exchange.

BANGKOK – Asian stocks sank Monday after a ratings downgrade rattled Europe and crucial talks aimed at nudging Greece toward solvency were mired in disagreement.

Benchmark oil prices were slightly higher near $99 per barrel and the dollar rose against the euro but fell against the yen.

Japan’s Nikkei 225 index slid 1.5 percent to 8,372.67 and Hong Kong’s Hang Seng lost 1 percent at 19,021.85. South Korea’s Kospi index dropped 1.1 percent to 1,855.95.

Benchmarks in Singapore, Taiwan, India, Indonesia and mainland China also fell.

Standard & Poor’s decision Friday to strip France of its top-notch credit rating and to downgrade eight other nations that use the euro battered investment sentiment, raising fears that a solution to the continent’s sovereign debt crisis may be far off.

Negotiations between the Greek government and its private creditors on a bond swap nearly collapsed Friday. The deal would reduce Greece’s debt by euro100 billion ($127.8 billion) by swapping private creditors’ bonds with new ones of a lower value.

Without the swap, debt-crippled Greece is unlikely to secure a second financial bailout — which could hurtle the country into bankruptcy and send economic shock waves around the world. Greece’s first bailout came in 2010.

“There is growing risk of a disorderly default by Greece, with talks reportedly breaking down after private sector creditors could not agree on the coupon level of fresh bonds,” said Stan Shamu of IG Markets in Melbourne, Australia.

“With a euro14.4 billion bond repayment due in March, and without restructuring in place, the entire sum would fall, making it increasingly likely that Greece will default,” Shamu wrote in a email.

Improving monthly machine orders in Japan did little to stem worries. Core private sector machinery orders, excluding shipbuilding and electricity, rose 14.8 percent in November. That was the fastest growth since January 2008, the government said.

Some analysts said they believed that dealers had largely factored in the risk of a Greek default in their trades and were more concerned about what simmering tensions in the Middle East and Nigeria might do to oil prices.

The U.S. is trying to rally global support for sanctions against Iran for its alleged efforts to develop nuclear weapons. Iran, the world’s fourth-largest oil exporter, has vowed to retaliate by shutting down the Strait of Hormuz, the passage for one-sixth of the world’s oil.

That could send prices skyrocketing and feed inflation in the U.S. and potentially hinder its fragile recovery from the Great Recession.

Meanwhile, a threatened strike by oil workers in Nigeria, a top oil supplier to the U.S., has further complicated the picture. The threat is in response to the government’s decision to end fuel subsidies, which more than doubled the price of gasoline in a country where most people live on less than $2 a day.

“Inflation is just around the corner,” said Tom Kaan of Louis Capital Markets in Hong Kong. “That to me is a bigger concern than Europe. Europe isn’t going to be resolved in a year’s time or three year’s time. I think Greece will go into default and then you will have a two-tiered Europe.”

Financial-related shares headed lower amid worries that the eurozone debt crisis could put pressure on bank lending. Mitsubishi UFJ Financial Group Inc. fell 2.4 percent and Hong Kong-listed Agricultural Bank of China lost 1.4 percent.

In Australia, Platinum Asset Management fell 2.6 percent after the fund last week forecast a drop in profit. But Leighton Holdings jumped 4.4 percent after the construction giant upgraded its underlying profit forecast.

Japanese exporters continued to suffer on the back of a strong yen, which reduces the value of profits earned overseas. Sharp Corp. dropped 3.2 percent, and Sony Corp. fell 2.3 percent. Mazda Motors Corp. was down 3.1 percent.

In energy trading, benchmark oil rose 17 cents to $98.87 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 40 cents to close at $98.70 per barrel in New York on Friday.

The euro fell to $1.2643 from $1.2670 late Friday in New York. The dollar fell to 76.83 yen from 76.96 yen.

BANGKOK – Asian stock markets rose Tuesday, as market confidence grew after the release of manufacturing data that showed improvement in Europe.

Benchmark oil rose above $100 per barrel while the dollar fell against the euro and the yen.

Hong Kong’s Hang Seng index jumped 1.9 percent to 18,771.12. South Korea’s Kospi index rose 2.1 percent to 1,863.88 and Australia’s S&P ASX 200 gained 1.2 percent at 4,104.

Benchmarks in mainland China and Japan were closed for the extended New Year’s holiday.

Korean shipbuilders and refiners led the climb on the Kospi, Yonhap News agency said, citing analysts. Hyundai Heavy Industries, the country’s leading shipbuilder, jumped 4.8 percent and SK Innovation soared 6.4 percent.

Hong Kong-listed oil shares also posted solid gains. PetroChina Co., the country’s largest oil and gas producer, added 4 percent and China Petroleum & Chemical Co., Asia’s biggest oil refiner, gained 4.3 percent.

Australian banks were boosted by gains in Europe. Commonwealth Bank of Australia rose 1.3 percent, National Australia Bank jumped 2 percent and Westpac Banking Corp. added 1.2 percent.

On Monday, German and French stocks rose in light volumes as a reading of manufacturing activity in Europe improved.

Investors appeared to be reassured by data that showed European manufacturing activity improved in December from November.

But the purchasing managers index levels still show a fifth straight month of contraction — an indication of recession in the eurozone, analysts said.

“It seems unlikely that equity gains will be sustained over the rest of this week, with risk aversion set to remain elevated against the background of ongoing Eurozone debt and global growth concerns,” Credit Agricole CIB said in a research note.

Many of the world’s leading indexes are starting 2012 after a down year. Britain’s FTSE was off 5.6 percent by year end, Japan’s Nikkei fell 17 percent to its lowest close since 1982, and the Standard & Poor’s 500 showed zero gain.

Data releases later in the week such as eurozone inflation on Wednesday and German factory orders and U.S. non-farm payrolls on Friday will give traders more grist.

Benchmark crude for February delivery rose $1.46 to $100.29 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 82 cents to settle at $98.83 in New York on Friday.

In currencies, the euro rose to $1.2979 from $1.2946 late Friday in New York. The dollar fell to 76.84 yen from 77.78 yen.

BANGKOK – Asian stock markets strengthened Friday, the last day of a tumultuous trading year, after Wall Street posted gains following a spurt of positive U.S. economic data.

Benchmark oil rose above $100 per barrel and the dollar weakened against the yen and the euro.

Japan’s Nikkei 225 index, after three straight days of losses, rose 0.4 percent to 8,429.45. Hong Kong’s Hang Seng Index gained 0.4 percent to 18,466.57. Benchmarks in mainland China, Malaysia, Indonesia and New Zealand were also higher.

Australia’s S&P ASX 200 fell 0.1 percent to 4,065.40. Taiwan and Singapore were also lower.

South Korea’s benchmark Kospi, whose last trading session of the year was Thursday, nosedived in lockstep with other key Asian indexes that suffered from the effects of natural disasters, a swelling European debt crisis, and a wobbly recovery in the U.S.

China’s benchmark Shanghai Composite Index lost 21 percent in 2011 as the impact of Beijing’s multibillion-dollar stimulus faded and the government tightened curbs on lending and investment to cool blistering economic growth.

Japan’s benchmark Nikkei lost a fifth of its value over the past year, starting with a plunge after the March 11 tsunami and earthquake disaster that destroyed huge chunks of the island nation’s northeastern region, left 20,000 people dead or missing and set off the world’s worst nuclear crisis since Chernobyl.

Disaster damage extended to key suppliers for major companies like Toyota Motor Corp. and Sony Corp., which suffered production disruptions. Later, severe flooding in Thailand caused similar problems for automakers, including Honda Motor Co., but on a smaller scale.

The Nikkei recouped some losses by July, but then started a decline that has the benchmark hovering at below the March value.

On Thursday on Wall Street, positive news on home sales and improved prospects for job growth sent stocks higher Thursday.

The four-week average of unemployment claims fell to a 3 1/2 year low, an indication that hiring could pick up. And the number of Americans who signed contracts to buy homes in November rose to the highest level in 18 months, industry experts said.

The Dow closed at 12,287.04, a gain of 1.1 percent. The S&P 500 rose 1.1 percent, to 1,263.02. The technology-heavy Nasdaq composite rose 0.9 percent to 2,613.74.

Benchmark crude for February delivery rose 30 cents to $99.95 a barrel in electronic trading on the New York Mercantile Exchange. The contract added 29 cents to settle at $99.65 in New York on Thursday.

In currency trading, the euro rose slightly to $1.2940 from $1.2938 late Thursday in New York. The dollar fell to 77.51 yen from 77.65 yen.

___

AP Business Writers Joe McDonald and Yuri Kageyama contributed from Beijing and Tokyo.

SINGAPORE (Reuters) – Asian stocks slipped on Thursday on weakness in the U.S. and European share markets and caution ahead of an Italian debt sale, though year-end window dressing of portfolios by some traders helped trim losses.

European shares are expected to inch higher, reversing some of the previous session's losses, with cautiousness ahead of the key Italian debt auction by Italy seen limiting the gains.

Spreadbetters expect London's FTSE (.FTSE) to open up 0.04 percent, Frankfurt's DAX (.GDAXI) to open up 0.3 percent, and Paris' CAC 40 (.FCHI) to open up 0.3 percent.

The euro extended losses against the dollar to near a one-year low, and a 10-year low against the yen, while the sell-off in stocks and a firm U.S. currency helped crude oil snap a six-session rally and kept gold prices near a three-month low.

The Nikkei (.N225) ended 0.3 percent lower, recouping some of its 1.1 percent intraday loss. The MSCI ex-Japan Asia Pacific index (.MIAPJ0000PUS) also shed 0.3 percent, weighed down by consumer and material stocks. Both indexes look set to be down about 18 percent during 2011.

Traders said Italy's sale of up to 8.5 billion euros ($11 billion) of debt later on Thursday will provide further cues for risky assets.

The auction is seen as the first test of banks' willingness to buy longer-term sovereign debt with the nearly 500 billion euros they borrowed last week from the European Central Bank.

While Italy's short-term funding costs halved at an auction on Wednesday, market players are worried that thin volumes prevalent across markets near the end of the year could complicate its efforts to sell longer-dated bonds.

"If it goes well, it's an indication that, one, yield is coming down, so the cost of funding is falling for the Italian government," said Martin Lakos, division director at Macquarie Private Wealth.

"And, two, if there's demand for the paper, that's a sign of confidence, which is what the market's in real need of."

EURO, OIL, GOLD SLIP

The euro weakened in Asia, pressured by stop-loss selling from Japanese retail investors as well as some offloading by exporters, with moves amplified in poor year-end liquidity and traders said the currency is likely to stay vulnerable.

The single currency hit $1.2887, moving closer to its 2011 trough of $1.2860 on January 10. Against the yen, the euro skidded to a 10-year trough around 100.70, before steadying at 100.88.

At 0615 GMT, the euro traded at 1.2926 versus the dollar and 100.47 versus the yen.

"Nobody sees anything on the horizon that could be mildly positive for the euro," said Rob Ryan, FX strategist for BNP Paribas in Singapore.

The one factor that may lend the euro some support is market positioning, which is already tilted heavily toward being short the euro, Ryan said, adding that another is the potential for fund repatriation by European players.

Crude oil, which had gained for six sessions on heightened supply worries after Iran threatened to block the Strait of Hormuz, eased as traders viewed the threat as rhetoric.

"A big increase in U.S. crude oil stocks and the falling euro against the dollar are the main pressure points for the market at the moment," said Ken Hasegawa, a derivatives manager with brokerage Newedge in Tokyo.

"We also had six consecutive days gaining in the oil market, so it is not strange to see some profit-taking from these sharp gains."

Brent eased three cents to $107.53 a barrel by 0207 GMT, adding to a loss of nearly $2 the day before.

Gold wallowed near a three-month low on Thursday, remaining under pressure due to a firm dollar, while investors fretted over the Italian bond auction.

Spot gold edged down 0.3 percent to $1,550.90 an ounce by 0022 GMT, on course for an 11-percent decline in December. It hit a three-month low of $1,549.24 in the previous session.

(Additional reporting by Sonali Paul in MELBOURNE, Masayuki Kitano and Randy Fabi in SINGAPORE; Editing by Richard Borsuk)