By Hideyuki Sano
TOKYO (Reuters) - Asian shares edged higher in early trade on Wednesday on fresh signs of strength in the U.S. economy and diminishing concerns over the diplomatic standoff between the West and Russia.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 percent, with Australia stocks 0.6 percent higher. Nikkei futures last stood at 0.7 percent above their local close.
U.S. consumer confidence rose more than expected in March, climbing to its highest level since January 2008 and U.S. house prices increased solidly in January.
The reports were the latest in a string of positive reads on the U.S. economy, adding more credence to the view that softness earlier this year was related to inclement weather and not economic weakness.
The upbeat data helped Wall Street shares rebound after a two-day decline, with the Standard & Poor's 500 Index gaining 0.4 percent.
Geopolitical tensions over Ukraine eased somewhat after a meeting of Western leaders ended with little more than fist-shaking at Russia. U.S. President Barack Obama and his allies agreed to hold off on more damaging economic sanctions unless Moscow goes beyond the seizure of Crimea.
The news that Moscow's and Kiev's foreign ministers had held an impromptu first meeting also led investors to believe the crisis triggered by Russia's annexation of Crimea is not heading into a wider armed conflict.
"The markets were worried that Russia might invade the southern or eastern part of Ukraine after Crimea. But the chances of that happening seems to be slim now, reducing investors' risk aversion," said Kyosuke Suzuki, director of forex at Societe Generale.
Investor relief was palpable in Russia, where the rouble firmed to pre-Crimea crisis levels.
The rouble rose about 1.5 percent on Tuesday against the dollar-euro basket, its biggest gain in 1-1/2 years, to 41.68 to the basket, hitting a one-month high.
The MSCI emerging equities index also rose to a two-week high, with Brazilian shares tapping five-week highs despite a downgrade of Brazil's credit rating by U.S. rating firm Standard & Poor's.
Expectations that China will take more steps to bolster its sagging economy also underpinned many markets leveraged to the Asian giant, including Brazil, Australia as well as a host of commodities.
London copper futures rose to a two-week high of $6,623.75 per tonne on Tuesday, while other commodities that had been battered earlier this month -- ranging from iron ore and steel -- also rebounded from their lows.
The Australian dollar hit four-month high of $0.9175 on Tuesday and last stood at $0.9159.
Other major currencies were stuck in well-worn ranges, with the euro fetching $1.3826 and the yen changing hands at 102.28 yen to the dollar.
On the other hand, precious metals lost some of their allure as concerns over Ukraine ease and as U.S. short-term rates have risen.
Gold hit a five-week low of $1,305.59 per once on Tuesday and last stood at $1,309.54 while silver dropped to seven-week low of $19.78 per once.
(Editing by Shri Navaratnam)