The Nikkei rallied on Thursday as investors snapped up shares of Japanese exporters after the dollar hit two-week highs against the yen, but markets elsewhere in Asia were more subdued ahead of the influential U.S. non-farm payrolls report.

Copper climbed 1 percent to a high of $9,654.25 a tone, nearing a record high of $9,754 struck on Tuesday, after an ADP report showed a record 297,000 U.S. private sector jobs were created in December, the clearest signal in months that a recovery in the world's biggest economy was shifting up a gear.

The figure prompted analysts to raise their forecasts for the closely watched non-farm payrolls data, with estimates now centering on an increase of 175,000 jobs, up from 140,000 in an earlier Reuters survey.

While some analysts were skeptical of the size of the jump in the ADP job report, it does follow a string of recent upbeat U.S. data showing the economy is picking up steam.

Markets will now wait for U.S. payrolls on Friday for confirmation of the strong trend, said Hiroaki Osakabe, a fund manager at Chibagin Asset Management. But investors will then focus on how the U.S. data will impact the dollar/yen rate.

Japan's Nikkei 225 index <.N225> rose 1.2 percent and breached the psychologically important barrier of 10,500 to reach its best level since May 2010.

Major exporters including Canon Inc <7751.T> and Toyota Motors <7203.T> climbed more than 1 percent.

MSCI's Asia Pacific index excluding Japan <.MIAPJ0000PUS>, however, slipped 0.1 percent, having drifted in and out of positive territory. Earlier this week technical indicators showed it was close to being overbought after a strong end-2010 rally, making investors wary that markets were due for a pullback.

South Korea's KOSPI <.KS11> and Hong Kong's Hang Seng index <.HSI> were both flat, while China's Shanghai Composite index <.SSEC> shed 0.7 percent.

Australia's S&P/ASX 200 index <.AXJO> reversed early gains ad slid 0.4 percent as concerns over severe floods in the country's northeast made investors unsure of how to judge company earnings in 2011.

Global miner BHP Billiton fell 0.5 percent and Rio Tinto eased about 0.1 percent.

DOLLAR FIRM

The dollar rose to 83.39 yen, reaching highs not seen since December 23, while the euro wallowed below $1.3200, having fallen below that level overnight for the first time since December 29.

The dollar index <.DXY>, which tracks the greenback's performance against a basket of major currencies, was little changed at 80.218, after topping out at a fresh one-week high of 80.353.

As long as the key jobs data on Friday is in line with expectations, the dollar is likely keep its gains, but it looks hard for it to climb higher as the market has already priced in good numbers, said Hideki Hayashi, a global economist at Mizuho Securities.

U.S. crude oil edged up 0.1 percent to $90.42, after trading as high as $90.71, not far from a 27-month high of $92.58 set in the first trading day of the year.

(Addititional reporting by Antoni Slodkowski and Kaori Kaneko in Tokyo; Editing by Kim Coghill)

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