By Masayuki Kitano and Ian Chua
SINGAPORE/SYDNEY (Reuters) - Asian stocks clawed higher on Thursday but gains were tempered by concerns about political turmoil in Portugal and investor caution ahead of key events including Friday's U.S. jobs data.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.1 percent, recouping a portion of Wednesday's slide of more than 2.4 percent.
Regional shares were broadly higher, with Hong Kong equities rising 1.9 percent after sliding 2.5 percent the previous day, while Shanghai stocks rose about 1 percent.
Japan's benchmark Nikkei average underperformed, however, easing by 0.2 percent.
"Volume is likely to stay low because of fewer participants as the U.S. markets will be closed later today," said Hiroichi Nishi, an assistant general manager at SMBC Nikko Securities.
"Investors are focused on Friday's U.S. jobs data, so they won't take large positions today."
Investors are focusing on the U.S. nonfarm payrolls data for fresh clues on when the Federal Reserve will start scaling back its $85-billion-per-month bond buying programme.
Growing speculation that the Fed might start tapering its monetary stimulus later this year had helped weigh on Asian equities last quarter, with the MSCI Asia-Pacific ex-Japan index sliding nearly 8.6 percent in the April-June period.
"If anything, a relatively ordinary number would probably be more positive. The market could take a hit if the numbers are too strong," said Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore, referring to the jobs data and the potential impact on Asian equities.
A political crisis in Portugal was another reason for caution. The Portuguese government is struggling to survive following the resignations of its foreign minister and finance minister this week, which could deprive it of a majority in parliament.
Portugal's stock market dropped more than 5 percent on Wednesday, suffering its biggest fall in around three years, while government bond yields briefly jumped above 8 percent for the first time since November.
Ructions in financial markets there threatened to spill over to neighbouring countries and raise borrowing costs.
That risk saw the euro fall as much as 1.5 percent against the yen at one stage to 128.66 on Wednesday. It has since recovered to 129.80.
Against the dollar, the common currency stood at $1.2994 down 0.1 percent but above a five-week low of $1.2923 set on Wednesday.
The erratic moves overnight were due in part to the reluctance of investors to hold large bearish positions going into Thursday's ECB meeting.
While the ECB is expected to leave interest rates unchanged, it is likely to try to reassure investors rattled by new political stress in Europe and the U.S. Federal Reserve's plans to begin winding up its stimulus.
U.S. crude edged up 0.1 percent to $101.34 a barrel, not very far from a 14-month high of $102.18 set on Wednesday.
Oil prices had pushed higher on Wednesday as the market remained wary of the unrest in Egypt that threatens to further destabilise the Middle East region, which pumps a third of the world's oil.
Unrest in Egypt came to a head on Wednesday, when the country's armed forces removed President Mohamed Mursi to force a resolution to the political crisis, paving the way for an election.
Renewed geopolitical tensions triggered safe-haven buying that helped underpin bullion. Spot gold edged up 0.4 percent to $1,255.81 an ounce.
(Additional reporting by Ayai Tomisawa in Tokyo)
