Global investors have been keenly awaiting US financial results, which move into high gear next week when Goldman Sachs, JP Morgan Chase and Citigroup are all set to report.

"If US banks show some signs of improvements and stabilisation, the index could make a more meaningful rebound. Better numbers from banks will point to stronger economies in the second half," said Lee Sun-yeob, a market analyst at Goodmorning Shinhan Securities.

But there was little joy for financials in Japan a day after its third-largest bank, Sumitomo Mitsui Financial Group, said it faces a net loss of $3.9 billion for the financial year just ended and would raise as much as $8 billion through the sale of shares.

This revived worries for its larger rivals, seen as even more sensitive to declines in Japanese share prices, with No. 2 bank Mizuho Financial Group tumbling 9.6 per cent.

EURO FALLS

The MSCI index of Asia-Pacific stocks outside Japan rose 0.5 per cent, back near a six-month peak hit on Monday.

The euro fell to its lowest in almost a month against the dollar, dented by holiday trade and a view the European Central Bank may be edging closer to unconventional easing.

ECB President Jean-Claude Trichet said on Thursday the ECB still had some leeway to cut its main interest rate from its record low of 1.25 per cent.

He repeated it would lay out plans for possible unconventional monetary policy measures at its next meeting in May. He did not give details, but another ECB official said buying debt could ease credit availability.

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