Asian shares tread water, on track for weekly rise

Euro remains close to 9-month lows after downbeat data

Asian shares got off to a lacklustre start on Friday but were still on track for a winning week, while the euro remained close to nine-month lows after downbeat data.

Euro zone bond yields dropped to record lows after Germany reported its economy unexpectedly shrank in the second quarter, raising expectations of more European Central Bank easing measures.

On Wall Street, US stocks rose on Thursday after a rise in jobless claims suggested the US Federal Reserve will be in no hurry to hike interest rates, and after Russia's leader made conciliatory comments about Ukraine.

"Most equity markets in Europe and the Americas ended the day higher, likely bolstered by the 'good news is bad news' presumption that weak economic data would elicit an expansionary policy response, and by conciliatory comments from Russian President Vladimir Putin," strategists at Barclays said in a note to clients.

On Thursday, Putin told Russian ministers and members of parliament in Crimea that Russia would stand up for itself but not at the cost of confrontation with the outside world.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat in early trade, on track for a weekly gain over 2%.

Japan's Nikkei stock average edged down slightly, but was poised to gain over 3% for the week.

US Treasury yields remained close to recent lows, with the yield on the benchmark 10-year US Treasury note at 2.405% in Asia, not far from its US close of 2.398% on Thursday. A week ago, it fell to 2.349%, a level not seen since June 2013.

Yields in Europe slid to even lower levels after the weak German data, which followed figures showing a similar second quarter contraction in Italy and stagnation in France, Germany's biggest trading partner.

The yield on Germany's 10-year bond briefly traded below 1% for the first time to 0.988%, according to traders who contribute data to trading platforms. Spanish and French bond yields also fell to record lows.

The euro last traded at $1.3361, steady on the day but not far from last week's nine-month low of $1.3333. It was also flat against the yen at 136.96.

The greenback edged slightly higher to 102.52 yen.

In commodities trading, the weak economic data weighed on crude prices. US crude shed about 0.1% to $95.53 a barrel after losing more than $2 in US trade.