* Oil consolidates overnight gains in choppy trade
* Fed minutes suggest cautious path to more tightening
* Asian stock valuations near long term averages
By Saikat Chatterjee
HONG KONG, Jan 5 (Reuters) - Asian stocks climbed for an eighth consecutive day on Thursday, buoyed by further gains on Wall Street and an overnight bounce in oil prices that bolstered energy and resource shares.
Also underpinning the cautious streak of optimism has been a steady stream of upbeat factory and service sector surveys out of the U.S., Europe and Asia this week, prompting some banks to raise their global growth forecasts for 2017.
European stocks are set to take their cues from a firm Asia with index futures pointing to modest gains.
MSCI’s broadest index of Asia-Pacific stocks outside Japan rose more than 1 percent, extending a rally that has seen it gain 2 percent in the opening days of 2017.
India and Hong Kong led gains, while Japan’s Nikkei slipped 0.3 percent as the yen edged up on the dollar. Philippine shares rose to their highest levels in nearly two months and Singapore shares rose 1.3 percent.
“Recent economic data is pretty good so markets are in risk-on mode overall and the dollar is supported. But U.S. bond yields are being capped so the dollar is losing the driver behind its rally,” said Yukio Ishizuki, currency strategist at Daiwa Securities.
U.S. shares ended higher on Wednesday even after minutes from the Federal Reserve’s December meeting showed concerns that quicker economic growth under the Trump Administration could require faster interest rate increases to ward off inflation.
The FOMC minutes noted upside risk to growth forecasts and uncertainty over the level of fiscal stimulus, while some members warned that the tighter labour market could signal a more aggressive path of rate increases.
Still, with just over two weeks before U.S. President-elect Donald Trump takes office, Fed officials and global investors are also waiting for evidence that his campaign promises will be approved by Republican lawmakers and kick the U.S. economy into higher gear.
“The December minutes reinforce our view that the FOMC remains on a cautious and gradual rate hike trajectory amid an uncertain fiscal and economic outlook,” OCBC said in a note.
Despite the extended bounce in Asian stocks, valuations remain at moderate levels, suggesting more institutional inflows if market conditions remain benign.
Valuations for Asian stocks are near 10-year averages in terms of price-to-book and a price-to-earnings multiples, according to Reuters data.
Growth in China’s services sector accelerated to a 17-month high in December, a private survey showed, adding to views that the world’s second-largest is entering the new year with stronger momentum.
The strong pick-up mirrored improvements in manufacturing surveys earlier this week, as market watchers debate whether China’s leaders will settle for a more modest growth target this year in order to focus on more pressing issues such as an explosive growth in debt.
In currencies, the dollar briefly stumbled after policymakers noted extended gains in the greenback would weigh on inflation, though it managed to pare losses by the end of a choppy U.S. session.
The dollar was trading around 116.3 handle against the Japanese yen while China’s offshore yuan strengthened against the dollar after posting its biggest daily gain against the dollar in a year.
China stepped into both its onshore and offshore yuan markets to shore up the faltering yuan for a second day on Wednesday, sparking speculation that it wants a firm grip on the currency ahead of Trump’s inauguration on Jan. 20.
U.S. Treasuries consolidated recent gains after the Fed minutes with two-year bond yields edging lower to 1.22 percent.
After rising nearly 2 percent overnight, oil prices dipped in Asian trade on doubts that producers would fully deliver on promises to cut output, although record U.S. automobile sales and falling crude stockpiles offered markets some support.
U.S. West Texas Intermediate (WTI) crude oil futures were flat at $53.25 per barrel and Brent crude futures, the international benchmark for oil prices, were trading at $56.39 per barrel.
Additional reporting by Hideyuki Sano in Tokyo; Editing by Eric Meijer and Kim Coghill