Asian shares shrugged off early losses as crude oil prices pulled away from their overnight lows, while the Australian dollar grabbed the spotlight and surged after a much stronger-than-expected employment report.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.6 per cent, erasing its early modest losses.

US crude futures steadied in Asia after tumbling 3 per cent overnight on worries about higher crude inventories. They were last up about 0.6 per cent at $43.19 a barrel. Brent crude added 0.7 per cent to $46.11 though was still not far from their lowest levels since August.

Prices of other commodities also weakened after the previous session's downbeat Chinese industrial output data, which continued to pressure shares in resource-rich Australia. The S&P/ASX 200 index was down 0.1 per cent, though it pared its earlier losses after the jobs report surprised on the upside.

Employment jumped 58,600 last month, driving the jobless rate down to a five-month low of 5.9 per cent and beating the market consensus for a 15,000 rise and a steady unemployment rate of 6.2 per cent.

The Australian dollar jumped three-quarters of a US cent to $0.7155, and was last up 1.1 per cent at $0.7139.

Japan's Nikkei stock index was slightly higher, erasing earlier losses.

Data released before the market opened showed Japan's core machinery orders rose 7.5 per cent in September, marking the first increase in four months, though orders were down sharply in the third quarter.

"Companies are taking a very cautious stance toward capital expenditure," said Norio Miyagawa, a senior economist, Mizuho Securities.

"The health of overseas economies, particularly China, is one factor. Also, it's difficult for companies to have the conviction that the domestic economy will grow rapidly."

South Korean shares were down 0.1 per cent. Earlier on Thursday, the Bank of Korea kept rates steady for a fifth straight month as expected.

The US bond market was closed for Veterans Day on Wednesday, and while other markets were trading, activity was lighter than usual.

With no directional guidance from US Treasuries, some investors took profits after the dollar's recent rise in the wake of last Friday's stellar US employment report that led many to increase their bets that the Federal Reserve was on track to hike interest rates at its meeting next month.

US data will be increasingly important to markets ahead of the Fed's December policy review.

"Friday's US retail sales report is important for the dollar but unless spending contracts sharply, it will not alter the market's expectations for Fed policy," said Kathy Lien, director of FX strategy for BK Asset Management.

"In fact with average hourly earnings on the rise and payrolls increasing more than expected, chances are the report will breathe new life into the dollar," she said in a note to clients.

The dollar index, which tracks the greenback against a basket of six major peers, edged down 0.2 per cent to 98.772, below a seven-month peak of 99.504 scaled on Tuesday.

The dollar edged up to 122.94 yen against its Japanese counterpart, below this week's 2-1/2-month high of 123.60, while the euro added about 0.2 per cent to $1.0769 , recovering from this week's nearly seven-month low of $1.0674. – Reuters