Asian shares lifted by China data, yen retreats
Tokyo: Asian shares climbed to a two-week high on Monday, and the Australian dollar and copper gained, as China said its manufacturing expanded in August at the fastest pace in more than a year.
A delay in potential US military action against Syria, as US President Barack Obama sought Congressional support, also helped boost short-term risk appetite.
China's bullish purchasing managers' index joined recent positive data from the U.S. and Europe, raising hopes the global economy was on a firmer footing.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.9 percent, hitting a two-week high and extending a 2.1 percent rise in the previous two sessions, while Hong Kong's Hang Seng Index climbed 2 percent.
Japan's benchmark Nikkei gained 0.9 percent.
Steven Englander, Citi's global head of G10 FX strategy, recommended investors short the yen on the back of the Chinese figures, the Syrian news, and a panel supporting an increase in Japan's sales tax.
China's official purchasing managers' index (PMI) rose to the highest level since last April and topped market expectations.
"This will reinforce views of China stabilisation. It is a risk positive, if only because it removes some of the short-term risk that the China slowdown could spiral further downwards," Citi's Englander wrote in a note.
A separate manufacturing PMI report from HSBC, released on Monday, showed activity in privately-owned factories increased over August for the first time in four months.
The yen had risen recently on heightened geopolitical tensions and as investors dumped emerging market currencies to position themselves for the U.S. Federal Reserve to begin reducing stimulus, perhaps from its meeting later this month.
On Monday, the yen slipped 0.4 percent to 98.48 yen to the dollar, pulling well away from last week's low of 96.81, and eased 0.2 percent to 129.995 to the euro.
The Australian dollar, which is seen as a proxy for Chinese growth because of the two countries' close trade ties, rose 0.6 percent to USD 0.8961.
Against a basket of major currencies, the U.S. dollar .DXY held steady at a four-week high.
Trading activity was likely to be light with U.S. markets closed for the Labor Day holiday.
Buoyed by the factory activity data from top-consumer China, copper prices rose 1.8 percent and were on track to end a four-day losing run.
Oil and gold prices fell as investors unwound their positions after the U.S. delayed a military strike against the Syrian government, which is accused of using chemical weapons against civilians.
Brent crude prices dropped 1 percent to below USD 113 a barrel, on track for a third-day of decline. They touched a six-month peak of USD 117.34 last week on concerns that a U.S. military intervention could lead to retaliation and disrupt crude supply in the Middle East region, which pumps a third of the world's oil.
Safe-haven gold shed 0.4 percent to around USD 1,390 an ounce, hitting a one-week low.