Asia markets tepid after another crude sell-off but Tokyo rallies

Japanese shares rallied Friday as the dollar surged against the yen ahead of key US jobs data, while other Asian markets swung as energy firms were hit by another sharp sell-off in oil.

With the Federal Reserve all but certain to hike US interest rates at a much-anticipated meeting next week the non-farm payrolls release later in the day will be pored over for clues on bank policymakers's plans for the rest of the year.

The anticipation sent the dollar bursting past 115 yen on Thursday for the first time since the end of January and managed to hold on in early Asian business, providing rich picking for Japanese traders buying the country's exporters.

Tokyo's Nikkei ended the morning up 1.3 percent.

"Now the market appears convinced that the Fed will raise the rate, while investors are expecting encouraging US payroll figures," Toshikazu Horiuchi, a broker at IwaiCosmo Securities, told AFP. "All in all, Tokyo market sentiment is positive."

The dollar also extended gains against the struggling pound, while it managed to temper a rally in the euro which got a shot in the arm after European Central Bank boss Mario Draghi offered an upbeat outlook for the eurozone economy.

The ECB upped its growth and inflation forecasts for this year while Draghi signalled it no longer sees an urgent need to undertake any extra support measures, meaning there would be no increase in euros being pumped into the system.

- Crisis passed? -

"Upgraded inflation forecasts and changed language from the ECB are signs the conversation is changing in Europe," said Greg McKenna, chief market strategist at AxiTrader.

"It was a subtle shift but an important one because even though the ECB president and his governing council keep their guidance ... relatively unchanged, their upgraded economic forecasts for the EU show that the worst of the euro crisis looks to be behind the 27-nation bloc."

Hong Kong rose 0.3 percent, Shanghai slipped 0.1 percent, Sydney added 0.6 percent and Seoul put on 0.3 percent. Singapore was flat while Manila and Taipei sank.

Another sharp loss in oil prices Thursday fuelled fresh selling in Asia's energy firms. Hong Kong-listed CNOOC and PetroChina each fell more than one percent, while Rio Tinto lost one percent in Sydney and Inpex retreated 0.2 percent in Tokyo.

West Texas Intermediate shed two percent and Brent lost almost as much, having both plunged more than five percent Wednesday on renewed worries about a global supply glut, increased US production and questions about an OPEC-Russia led drive to cut output.

Both main contracts edged up slightly Friday.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: UP 1.3 percent at 19,575.34 (break)

Hong Kong - Hang Seng: UP 0.3 percent at 23,562.69

Shanghai - Composite: DOWN 0.1 percent at 3,212.72

Euro/dollar: UP at $1.0590 from $1.0580

Pound/dollar: DOWN at $1.2156 from $1.2174

Dollar/yen: UP at 115.23 yen from 114.95 yen

Oil - West Texas Intermediate: UP 38 cents at $49.66 per barrel

Oil - Brent North Sea: UP 33 cents at $52.52 per barrel

New York - Dow: FLAT at 20,858.19 (close)

London - FTSE 100: DOWN 0.3 percent at 7,314.96 (close)