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Asian Markets Edge Higher, Commodities Eyed

Asian markets were mostly higher Friday, but lagging Wall Street's rise after some solid gains earlier in the week. Higher commodity prices also supported mining and energy-related stocks in Asia, though investors were reluctant to take big bets on increasingly expensive shares until more evidence emerged of a sustained recovery.

Concerns that rising bond yields, pointing to higher borrowing costs, could hamper the economic recession eased, as U.S. Treasuries rebounded after an auction of new notes saw yields move lower. Data showed a rise in U.S. durable goods orders, reinforcing hopes the economic slump is easing.

The U.S. dollar was down against the yen , though was still up 2.3 percent in May, the biggest monthly gain of the year, with Japanese investors finding value mostly in foreign bond markets. The yen got a boost after data showed Japanese industrial production rose 5.2 percent in April on a monthly basis, and the government expected continued gains through June. The euro fell against the yen after hitting a seven-week high overnight. Oil futures surged to trade just under $65 a barrel after OPEC decided to leave output unchanged and government data showed a steep drop in U.S. crude inventories.

Japan's Nikkei 225 Average closed up 0.75 percent, to hit its
highest level in over 7 months, buoyed by shippers and commodities-linked shares, on the expectation of growing demand from China.

South Korea's KOSPI ended slightly higher after volatile trade, with falls in banks weighing on the index, but some manufacturers rose on the back of strengthening earnings hopes and solid data.

Australian shares finished 1.7 percent higher as miners and bank stocks such as Commonwealth Bank of Australia forged ahead.

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Hong Kong shares rose 1.6 percent, with higher oil prices propping up energy stocks, but gains were tempered by a drop in HSBC Holdings as worries about the financial sector resurfaced.

Singapore's Straits Times Index closed 1.6 percent higher on increased participation after a technical glitch briefly disrupted trading in the morning session. Top percentage gainers among blue chips include CityDev, up 4.5 percent, Sembcorp Marine, up 5.5 percent and Jardine Matheson, up 3.2 percent.

Markets in China are closed for a public holiday and will reopen Monday.