by FP Staff Aug 30, 2013 07:00 IST
TOKYO (Reuters) - Asian stocks rose in early trading and oil prices tumbled as a possible U.S. military strike on Syria appeared less likely.
The dollar remained around a three-week high against a basket of currencies after data showed the U.S. economy grew at a quicker-than-expected annual pace of 2.5 percent in the second quarter.
The GDP data, combined with a fall in weekly jobless claims, reinforced expectations that the U.S. Federal Reserve will begin tapering its asset-buying stimulus as early as next month.
Meanwhile, any U.S. intervention in Syria in response to what Western governments believe was President Bashar al-Assad's use of chemical weapons looked set to be delayed at least until United Nations investigators report back after leaving Syria on Saturday.
The dollar index was last slightly higher at 81.977, after rising as high as 82.067 on Thursday, its highest level since August 5.
Against the perceived safe-haven Japanese yen, the dollar traded up about 0.1 percent at 98.46 yen, up from a two-week low of 96.81 yen hit on trading platform EBS on Wednesday.
MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.1 percent, while Japan's benchmark Nikkei stock average rose 0.9 percent.
Some market participants said they expected profit-taking ahead of the U.S. holiday long weekend, although many investors would likely remain sidelined as the Syria situation continued to unfold.
"Fears about Syria may have abated, but uncertainty over possible military action against Syria in the mid-term will likely keep trading thin," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
Upbeat Japanese data also cheered investors. Japan's core consumer prices rose 0.7 percent in July from a year earlier, marking the second straight month of gains and hitting a near-five year high, while the jobless rate stood at its lowest level since October 2008 in July. The availability of jobs hit the highest level in more than five years.
Brent crude prices tumbled 1 percent to $113.97 a barrel after spiking to a six-month high on Wednesday on fears that any military action in the Middle East, which pumps a third of the world's oil, would disrupt crude supply.
Gold eased 0.3 percent to around $1,403.20 an ounce, moving away from a 3-1/2 month high hit on Wednesday as fears over Syria prompted a flight to safety.
Copper prices were nearly flat at $7,155.25 a tonne, after sliding for a third day on Thursday and reaching their lowest price in almost three weeks due to the stronger dollar, concerns about Syria and slightly higher inventories.
On Wall Street on Thursday, stocks ended higher in thin volume, taking back some lost ground after their worst daily decline since June earlier this week. Over the past two sessions, the Standard & Poor's 500 Index .SPX has gained about 0.5 percent, but remains down 1.5 percent for the week.
The looming reduction to the Fed's quantitative easing has taken a toll on U.S. stocks but emerging market currencies have born the brunt. The Indian rupee plunged to a record low earlier this week as policymakers scrambled for solutions.
"There are no easy choices for the central banks but the most urgent task is to move faster than investors can repatriate capital," strategists at Jefferies said in a note to clients.
"This means making the unpalatable decision of collapsing domestic demand by raising interest rates," they said.
On Thursday, Indonesia's central bank raised its main interest rates, the latest country forced to defend its currency as investors pulled out funds from emerging markets in search of safer havens.
(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Eric Meijer)
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