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Shares, dollar claw higher ahead of US jobs data

LONDON/HONG KONG--Financial markets were in a state of suspended animation on Friday as tension mounted ahead of jobs data that could make or break the case for an imminent scaling back in U.S. stimulus.

The to-and-fro of when the Federal Reserve will begin to halt the flow of cheap dollars has dominated trading worldwide for months and the main U.S. jobs indicator — non-farm payrolls, due at 1:30 p.m. GMT — may yet tip the balance again.

A bunch of top U.S. data has already come in strongly this week triggering a hefty sell-off in global stock and bond markets that had in most cases been at multi-year highs.

European bourses made a cautious recovery in early trade, but the week's turbulence, amplified by the diverging fortunes of the region's top economies, left the FTSEurofirst 300 index heading for its worst week in six months.

Government borrowing costs from Japan to Germany also hovered around fresh highs on trepidation the Fed could start tapering its US$85 billion of monthly debt purchases at its policy meeting on Dec. 17 and 18.

The median forecast is for an increase of 180,000 in U.S. payrolls with the jobless rate steady at 7.2 percent.

The market would tend to see anything over 200,000 as greatly adding to the chances of a start to tapering this month, while a result under 150,000 would diminish the risk.

For the moment, however, European shares were on track to snap a four-day run of falls as London's FTSE, Paris's CAC 40 and Frankfurt's Dax all gained 0.4 to 0.6 percent.

The Bundesbank gave German stocks a boost by raising its growth forecasts for the euro zone's largest economy for this year and next.

Asian markets mostly fell on Friday after better-than-forecast U.S. growth data added to expectations the Federal Reserve will start to wind down its stimulus program as early as this month.

With the strong figures raising the likelihood the central bank will ease up on its bond-buying, the dollar edged up against the yen.

Tokyo rose 0.81 percent, or 122.37 points, to 15,299.86 on bargain buying after losing more than 3.5 percent in the previous two sessions, while the weaker yen provided some support. Hong Kong finished 0.13 percent higher, adding 30.53 points to 23,743.10.

But Sydney lost 0.23 percent, or 12.0 points, to end at 5,186.0 and Seoul was 0.22 percent lower, giving up 4.36 points to close at 1,980.41. Shanghai finished 0.44 percent down, losing 9.96 points to sit at 2,27.11.

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