Asian shares, dollar gain as new quarter begins

Asian shares rose on Friday, looking to extend three straight quarters of gains, while the dollar strengthened against most major currencies after hawkish comments from a senior U.S. Federal Reserve official.

MSCI’s index of Asia-Pacific stocks outside Japan (.MIAPJ0000PUS) was up 0.27 percent on the day after touching its highest level since May 2008, prompted by optimism on global economic growth.

Japan’s Nikkei (.N225), however, was down 0.1 percent, erasing early gains.

Oil kicked off the new quarter in positive fashion with U.S. prices climbing after closing at their highest in 2- years on Thursday against the backdrop of continued fighting in Libya and unrest in the Middle East.

Gold fell on more tough inflation talk from U.S. central bankers after notching a 10th quarterly gain.

Investors are treading cautiously ahead of the latest payroll data from the United States later on Friday.

Another month of solid U.S. hiring, expected in the 200,000 area, should reinforce expectations of further global economic expansion but also of an accelerated shift in policy focus among central bankers to stem inflationary pressure.

“At the moment we’re getting dragged higher by the momentum we’re seeing in the U.S. economy,” said IG Markets analyst Ben Potter in Melbourne.

“We could be at the risk of some profit-taking today as people look ahead to tonight’s session but that doesn’t seem to be the case at the moment.”

Signs of improving business activity and rising inflation globally have led the U.S. Fed and the European Central Bank to ratchet up their inflation rhetoric, causing traders to second-guess whether U.S. and European rates will be on hold this year.

In the U.S., Minneapolis Fed President Narayana Kocherlakota told the Wall Street Journal on Thursday that the Fed could raise rates by the end of 2011, far sooner than expected by financial markets. Most analysts do not expect rate hikes until the second half of 2012.