Asian shares lifted by U.S. data, oil slides

By Lisa Twaronite

TOKYO (Reuters) - Asian shares got a lift on Friday after upbeat U.S. data suggested weaker oil prices are adding momentum to the American economy, though a continued slide in crude prices kept gains in check.

U.S. crude futures continued to drop after falling below the key psychological support level of $60 a barrel for the first time in five years, and stood at $59.30 in Asia, down more than 1 percent on the day.

Brent crude continued its march downwards on Friday and dropped to a 5-1/2-year low of $63 a barrel, bringing this week's losses to more than 8 percent. It was last down 0.5 percent at $63.40.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up about 0.2 percent, though on track for a loss of over 2 percent for the week.

Japan's Nikkei stock average added 1 percent, extending gains as the U.S. data lifted exporter shares, but was poised to book a loss of nearly 3 percent for the week.

"Increasing consumption in the U.S. is a big boost Japanese exporters," said Masayuki Otani, chief market analyst at Securities Japan, Inc.

Global crude prices have plunged in recent weeks on massive oversupply, raising fears that deflation could hit economies around the world. But data on Thursday showed that cheaper gasoline prices apparently helped U.S. consumer spending mark broad rises last month, and jobless claims also fell.

One potential risk on the horizon got a temporary reprieve, when the U.S. Senate approved a two-day extension of government funding late on Thursday to stave off shutdowns of federal agencies that otherwise would have begun at midnight.

Wall Street ended higher on Thursday, but Asian investors have mostly focused on the downside of lower energy costs, which dragged down equities here this week.

"The relentless decline in oil prices continues to unsettle risky asset markets. Oil prices have fallen to levels last reached in mid-2009, as OPEC cut its demand forecast to a 12-year low despite lower prices, and U.S. crude inventories rose," Barclays strategists said in a note.

The U.S. data helped the dollar wrest itself off a two-week low of 117.44 yen, and was last flat on the day at 118.63 yen.

The euro slipped about 0.1 percent to $1.2396, after top-rated euro zone bond yields inched lower on Thursday following a tepid response by banks to the European Central Bank's second round of long-term loans.

Investors awaited Chinese retail sales data, industrial output and fixed-asset investment data for November, to gauge the strength of the world's second-largest economy. Any signs of weakness are likely to raise expectations that Beijing will deliver further easing steps.

Spot gold slipped about 0.3 percent to $1,222.50 an ounce, though it was still on track for a gain of over 2 percent for a week in which it marked a seven-week high on Wednesday.

(Additional reporting by Thomas Wilson in Tokyo; Editing by Shri Navaratnam and Eric Meijer)