Asia stocks rise on Greece deal hopes, euro continues to ride high

TOKYO (Reuters) - Asian stocks rose on Thursday on hopes that Greece could be inching closer to a deal that would save it from default, while the euro continued riding high thanks to a spike in euro zone debt yields.

Risk appetite warmed after Greece's international creditors signalled on Wednesday they were ready to compromise to avert a default.

Japan's Nikkei and South Korea's Kospi both gained 0.3 per cent, while Australian shares added 0.2 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed.

The European common currency rode the momentum gathered overnight when the European Central Bank, in line with recent data suggesting deflationary pressures were not as pronounced as feared, raised its inflation forecast for 2015.

ECB President Mario Draghi followed up by saying the central bank saw no reason to adjust its monetary policy stance following the recent surge in European bond yields.

The prospect of the ECB not front-loading its bond purchases pushed euro zone yields up and propelled the euro higher.

The benchmark German 10-year Bund yield climbed to within a hair of 0.90 per cent overnight, from around 0.50 percent at the start of the week.

The euro was steady at US$1.1262, having rallied about 2.5 per cent so far this week.

"Unless there is a very big upside surprise in Friday's U.S. labor market report, the EUR/USD should make its way towards $1.15. The road may be bumpy and the rally could stall at the May high of 1.1466 but the path of least resistance for the EUR/USD is higher," wrote Kathy Lien, managing director of FX strategy for BK Asset Management.

In commodities, crude oil struggled after sliding overnight on concern generated by a big build in distillates and with OPEC expected to reject output cuts at its meeting on Friday.

U.S. crude crawled up 0.1 per cent to US$59.71 a barrel after plunging 2.6 per cent the previous day.