By Shinichi Saoshiro
TOKYO (Reuters) - Asian shares were subdued and the dollar held modest gains against the yen in early trade on Friday as markets held their breath ahead of the U.S. payrolls report later in the session - which could show the economy shaking off a severe winter.
The Asian markets drew scant impetus from Wall Street, which closed little changed ahead of the jobs report.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent in early trading, while Japan's Nikkei stock average lost 0.2 percent. China's markets are closed on Friday.
Market focus is now on whether the April jobs report, which a Reuters survey of economists forecast to show U.S. employment rising at its fastest clip in five months, would be strong enough to decisively tilt sentiment towards the U.S. economy.
U.S. economic indicators have been a mixed batch so far this week, with first quarter GDP and construction spending falling short of expectations while consumer spending recorded its largest gain in more than 4-1/2 years in March and factory activity accelerated last month.
U.S. Treasuries rallied on Thursday, focusing more on weaker data that helped build expectations the Fed would be kept from raising short-term rates before second-half 2015 and perhaps even lead it to pause stimulus tapering.
The 10-year U.S. Treasury note yield fell to a two-month low on Thursday, removing support for the dollar.
"After the weak GDP print, a strong non-farm payroll is unlikely to alter Fed rhetoric – therefore risk (equities and emerging markets) should rally, specifically in countries tied to the United States via trade," currency strategists at CitiFX wrote in a note to clients.
The dollar stood little changed at 102.32 yen after posting a modest gain against the Japanese currency on Thursday. The euro was also flat, trading at $1.3868.
Sterling was at $1.6892, hovering near a five-year high of $1.6921 hit on Thursday after robust manufacturing data bolstered optimism in the British economy.
In the commodities markets, oil remained under pressure after slipping Thursday on disappointing Chinese manufacturing activity and data showing U.S. crude stocks rose last week to their highest level since 1982.
U.S. crude futures fell 0.1 percent to $99.33 a barrel.
(Editing by Eric Meijer)