U.S. numbers hopeful, Asia grows cautious on stimulus

By Hideyuki Sano

TOKYO (Reuters) - U.S. and European data and company results offered hope the global recession had eased but still showed the West lagging Asia, where two major central banks flagged the need to rein in emergency stimulus.

After a mixed bag of numbers on both sides of the Atlantic this week, one of the earliest signposts to U.S. industry showed the factory sector in New York state nearly pulled out of contraction in July, the highest reading in more than a year.

European car sales also showed a first monthly increase in over a year thanks to incentives for scrapping cars in some major economies, though analysts cautioned that was also thanks to disastrous numbers a year earlier.

But despite signs that Britain's recession may have bottomed out, data on Wednesday showed unemployment hit its highest point since January 1997 in the three months to May.

Boosted by strong corporate results, world stock markets gained for a third day, yet markets were still far from convinced that the West is on a firm path to recovery from the deepest recession in decades.

"The market is prepared to shake off weak economic data, preferring to focus on consensus-breaking results and upbeat outlooks from corporates," said Henk Potts, equity strategist at Barclays Stockbrokers.

The outlook for the Asian economy is more upbeat.

The Bank of Japan on Wednesday extended its crisis funding support for businesses for another three months, but Governor Masaaki Shirakawa said improvements in markets had led it to stop short of a six-month extension into the new year.