By Lisa Twaronite
TOKYO (Reuters) - Asian shares pulled higher on Friday, on track for a winning week, while the euro remained close to nine-month lows after downbeat data raised expectations of more European Central Bank easing steps.
Conciliatory comments from Russian President Vladimir Putin on Thursday soothed some fears, although investors warily monitored the situation on Ukraine border. Dozens of heavy Russian military vehicles massed there as Moscow and Kiev struggled to agree on border crossing procedures for humanitarian aid.
Financial spreadbetters expected European shares to extend their rebound, calling Britain's FTSE 100 (FTSE) to open up 0.2 percent, Germany's DAX (GDAXI) 0.3 percent and France's CAC 40 (FCHI) 0.3 percent.
Euro zone bond yields dropped to record lows on Thursday after Germany reported its economy unexpectedly shrank in the second quarter.
"When it comes to news, at least economic, bad news has resumed its good connotations. Fears of a European recession and deflationary slump have been welcomed by markets now that the case for quantitative easing looks irrepressible," Jonathan Sudaria, a dealer at Capital Spreads, said in a note to clients on Friday.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) added 0.3 percent, poised for a weekly gain over 2.6 percent.
Japan's Nikkei stock average (N225) ended flat, though it gained 3.7 percent for the week, the biggest weekly gain since mid-April.
Some strategists said that the Japanese market's underperformance this year compared to other major markets is likely to make it appear as an attractive value play, particularly given the prospect of increased buying from the $1.2 trillion Government Pension Investment Fund. The fund is expected to announce more allocations to domestic stocks later this year.
"When you think globally, the Japanese market falls behind its peers," said Hiromitsu Kamata, head of Japanese equity target department at Amundi Japan.
The Nikkei has dropped about 6 percent since the beginning of the year, lagging the S&P 500's (SPX) 5.8 percent rise and a flat performance from the pan-European FTSEurofirst 300 index (FTEU3).
On Wall Street, stocks rose on Thursday after a rise in jobless claims suggested the U.S. Federal Reserve will be in no hurry to hike interest rates, and after Russia's leader made the conciliatory comments about Ukraine.
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.
U.S. Treasury yields remained close to recent lows, with the yield on the benchmark 10-year U.S. Treasury note (US10YT=RR) at 2.408 percent in Asia, not far from its U.S. close of 2.398 percent on Thursday. A week ago, it fell to 2.349 percent, 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
The euro last traded at $1.3365
The greenback edged up about 0.1 percent to 102.52 yen
In commodities trading, U.S. crude
Spot gold
(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Shri Navaratnam)