- Asian stocks traded mixed on Thursday with the Hang Seng retracing earlier gains ahead of U.S. June employment figures, released a day early because of the U.S.''s Fourth of July holiday.

Japan''s Nikkei 225 was flat after the yen weakened overnight, while elsewhere in Asia, South Korea''s KOSPI lost 0.3% and the Shanghai Composite was 0.4% lower.

Positive economic data in China and the U.S. buoyed markets, with stocks on Wall Street hitting record highs on Wednesday, while Hong Kong''s Hang Seng Index closed the previous session at its highest level for the year. Official data on China''s factory sector earlier this week--which hit a six-month high--has likewise encouraged investors.

The Hang Seng Index was up 0.1% after earlier gains as China''s official nonmanufacturing purchasing managers'' index dipped for the first time in five months--at 55 in June, compared with 55.5 in May. The measure is still higher than the 50 mark that separates contraction from expansion.

The Australian dollar fell sharply after Reserve Bank of Australia Governor Glenn Stevens suggested that record low rates were not flowing fully through to the economy and the exchange rate remained stubbornly high. Australia''s S&P/ASX 200 was up 0.5%.

Overnight, U.S. stocks ended mixed, buoyed by news out of the labor market and capped by comments from Fed Chair Janet Yellen, who said monetary policy is limited when dealing with financial stability risks.

The Dow 30 rose 0.12%, the S&P 500 index rose 0.07%, while the NASDAQ Composite index fell 0.02%.

Payroll processor ADP reported earlier in its nonfarm payrolls report that the U.S private sector added 281,000 jobs last month, beating expectations for an increase of 200,000 and the highest since November 2012.

The upbeat data eased concerns that headwinds may be slowing U.S. recovery and gave stocks room to rise.

Still, concerns begin to brew that as both the economy and the jobs market improve, labor costs will rise, which could show up in earnings reports down the road, which capped gains on Wall Street as investors priced in such scenarios.

A separate report showed that U.S. factory orders fell by a larger than forecast 0.5% in May.

Elsewhere, Federal Reserve Chair Janet Yellen said earlier that the appetite for risk appears to be on the rise, though the country''s top economist sees no need to immediately alter today''s accommodative monetary policy.

Corporate bond spreads have been falling as have volatility indicators such as the VIX, which may indicate investors are taking on risks despite the possibility of facing losses for which they might not be fully prepared, Yellen said in a speech at the International Monetary Fund.

Still, policy will remain accommodative, as Fed policies aren''t a panacea to deal with financial risks.

On Thursday, the U.S. is to publish data on its trade balance, a weekly report on initial jobless claims and closely watched government data on nonfarm payrolls and the unemployment rate, one day ahead of schedule, before the Independence Day holiday.

Later Thursday, the Institute of Supply Management is to publish a report service-sector activity.

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