A recent surge in Asian shares lost steam ahead of U.S. monthly jobs data later on Friday that may signal whether the global economy has indeed hit bottom, after stress tests on U.S. banks offered no real surprises.

A further dose of confidence on the economy will be key in extending the rally in global stocks, analysts said, especially as investors' worries about the world financial system recede.

Asian shares, for example, are up about 9 percent this week, bringing gains since their 2009 low in early March to around 51 percent.

Results from U.S. bank stress tests released after the close of Wall Street on Thursday showed smaller capital needs that once feared. These concerns had already been tampered down recently after reassurances from U.S. regulators.

If anything, the report -- which show U.S. banks need to raise a combined $74.6 billion -- helped remove a key uncertainty that had dogged global markets earlier this year, bolstering U.S. stock futures and likely push European shares higher at open.

But the dollar lost some ground after earlier broad gains.

There's now a sense that the market is already starting to search for new trading factors, basically looking to macro indicators for confirmation that the global economy is truly on a rising trend, said Masayoshi Okamoto, head of dealing at Jujiya Securities in Japan.

There are a number of signs that the global economy may have already seen the worst of times, with a drop in new U.S. jobless claims and better German manufacturing data on Thursday adding to that optimism.

The European Central Bank also joined other policy makers in cutting interest rates on Thursday, an action that had been widely expected, while adding it will buy up bonds for the first time, albeit in more limited fashion than other central banks.

There are, however, reasons for pause. A weak auction of 30-year U.S. Treasury bonds on Thursday raised worries about how much the world's top economy will have to pay to attract investors such as China to finance its big stimulus plans.

Some voices are also warning against too much optimism. China's vice premier Wang Qishan said the global financial crisis is spreading and the economy will get worse before it gets better, in a written article in the Financial Times on Friday.

The U.S. April employment data due out at 1230 GMT could be key in helping set a near-term course for global markets, with economists forecasting the pace of lay-offs has eased.

Economists polled by Reuters forecast 590,000 U.S. jobs were lost, which would be down from March, but they also expect the unemployment rate to have gained to 8.9 percent from 8.5 percent in the previous month.

Given the huge amount of cash standing on the sidelines, a positive surprise on the job report could extend the rally, Calyon said in a report referring to stock markets.

FINGERS CROSSED

The MSCI index of Asian stocks outside Japan <.MIAPJ0000PUS> rose 0.4 percent as of 0620 GMT, rebounding from losses in the morning session.

Fund flows into Asia have seen an upswing, helping the MSCI index strike its highest level since early October on Thursday.

The EPFR Global-tracked Asia ex-Japan Equity Funds posted the biggest inflows among the four major emerging markets equity fund groups for the second week running, taking in $1.62 billion.

Equity funds geared to China, Taiwan and Greater China accounted for two thirds of this week's flows into Asia ex-Japan Equity Funds.

Japan's Nikkei average <.N225> rose 0.5 percent to notch a new six-month close. Elsewhere, among the stronger gainers, shares in Singapore <.FTSTI> rose more than 1 percent, though other indexes such as in Hong Kong <.HSI> and South KOrea <.HSI> gained more moderately.

Some of the optimism about stocks were marred after shares of China Zhongwang <1333.HK>, Asia's largest maker of aluminum extrusion products, fell nearly 5 percent in their Hong Kong trading debut after the company raised $1.3 billion in the world's biggest IPO since August.

Corporate earnings reports were also a focus for investors. Shares in Toyota Motor <7203.T> fell 1.5 percent after the Nikkei business daily reported the world's biggest auto maker was likely to post hefty losses.

After the market's close, Toyota said had lost $6.9 billion the final quarter and forecast increasing losses this financial year.

Investors have favored riskier assets amidst the upswing in stock markets worldwide. U.S. crude futures rose 78 cents to $57.49 a barrel, heading for weekly gains of more than 7 percent, on the same hopes that the global economy may have reached bottom that are bolstering equities.

But another potential source of worry could come should doubts creep up about the ability of governments to finance the trillions being spent in spending plans or alternative measures such as buying corporate or government debt, as shown by the U.S. 30-year bond auction on Thursday.

The 30-year bond remained under pressure during Asia trading, with yields rising to 4.30 percent, up 1 basis point from late U.S. trading. On the other hand, the benchmark 10-year note gained ground, with yields down about 2 basis points to 3.32 percent.

The dollar index, a gauge for the greenback's performance against six major currencies, fell 0.2 percent to 83.739 <.DXY>, down after earlier posting modest gains.

The euro was unchanged from late U.S. trade at $1.3394, after dipping earlier when traders sold euros bought the previous day after the European Central Bank said it would buy about 60 billion euros ($79.6 billion) worth of covered bank bonds was seen as underwhelming in light of much bigger similar moves taken in other countries.

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