TOKYO, Oct 2 Reuters Asia39;s stock markets made a tentative start to the fourth quarter in holidaythinned trade on Monday, nudging sideways while the dollar held firm and a lastminute deal to avert a U.S. government shutdown lifted SP 500 futures.

Markets in India, Hong Kong and China were closed for a holiday.

Japan39;s Nikkei jumped as much as 1.7, before retreating to flat in the midafternoon. The yen fell to within a whisker of 150perdollar and its weakness is a boon for exporters39; and the pricing of their foreign earnings in yen.

An eleventhhour deal to avoid a U.S. government shutdown, struck over the weekend, also helped the mood and lifted U.S. stock futures by 0.5 in Asia. The weekend39;s stopgap funding bill allowed the government to keep operating through Nov. 17, and means key data releases including Friday39;s monthly payrolls report can go ahead on time.

European futures rose 0.2.

The shutdown risks are only delayed, not eliminated, TD Securities strategists wrote in a client note.

A sense of reduced uncertainty is likely to drive a small relief in markets, but market volatility is likely to remain elevated as investors wait for the next catalyst, which is likely to be toptier data.

Japanese stocks were also boosted by the Bank of Japan39;s quarterly Tankan survey, which showed an improvement in business sentiment. MSCI39;s broadest index of AsiaPacific shares outside Japan was flat.

DOLLAR RESILIENCE

Bond and foreign exchange trade remain…