The South African rand climbed nearly 1 percent against the dollar on Thursday, ranking among the top performers out of 20 emerging market currencies as investor fears of contagion from debt woes in Europe ebbed.

Government bonds also trekked higher as yields above 7 percent made local debt attractive to foreign investors, and stocks rose in line with global equities, led by Kumba Iron Ore after it issued an upbeat profit outlook.

The yield on the benchmark 2015 bond backtracked 3.5 basis points on the day to 7.425 percent, while that on the longer-dated 2026 slid five basis points to 8.48 percent.

The long end of South Africa's bond curve has been particularly attractive, with yields falling to multi-week lows. The 2026 issue fell to 6.45 percent in early Thursday trade, its lowest since June 10 according to Reuters data.

The rand was up 0.86 percent at 6.6798 by 1603 GMT after ending Wednesday's session at 6.7375. The currency touched 6.6762 earlier on Thursday, its strongest level since June 6.

"The rand has been on a winning streak for a couple of days and risk seems to be back on after Trichet's comments," a Johannesburg trader said.

European Central Bank President Jean-Claude Trichet said on Thursday the bank would keep providing liquidity to debt-ridden Portugal, which was downgraded to junk status this week, and that helped support risk appetite globally.

"We also have the local M&A news that has given the rand a boost, but I'm not sure how much more upside it has. The next big level is 6.6750 and if we break through that the rand could run away," the trader added.

Rand sentiment received a boost earlier this week from news that China's Jinchuan had made a $1.3 billion bid for copper miner Metorex, raising the prospect of substantial foreign exchange inflows.

The rand's current rally could soon run out of steam though: it failed to pierce 6.6750 in early June, and instead resumed a weakening trend that pushed it down to that month's low of 6.94.

On Thursday the JSE Top-40 blue=chip index added 0.53 percent to 28.928.73 and the broader All-share index rose 0.51 percent to 32,296.07.

"The key driver was the US jobs data ... which was better than expected. Everyone will be watching the non-farm payrolls tomorrow," one trader said, referring to data on Thursday showing hiring by U.S. private companies in June was more than double the amount expected.

Kumba Iron Ore was among the best performers on the blue-chip index after the miner said its half-year profit probably rose as much as 41 percent, sending its shares 2.25 percent higher to 500 rand.

Nedbank added 0.68 percent to 147.32 rand after the banking group said first-half profit increased at least 20 percent.

Bourse and mining heavyweights Anglo American and BHP Billiton also gained as base metal prices such as copper cruised higher. Anglo rose 1.19 percent to 430 rand and BHP Billiton jumped 1.60 percent to 269.99 rand.

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