SYDNEY, Dec 7, 2012 (AFP) - Fraser, who has played on three continents in the past three weeks, holed four straight birdies and an eagle in the second round to lead the field at six-under into the weekend rounds.
He led by a shot from first round leader John Senden and fellow Australian Brendan Jones.
A further shot back was Australian Nick Cullen, who posted his first professional win this year at OneAsia's Indonesia Open.
England's world number four Justin Rose was among a group of six golfers at three-under.
Fraser has had a busy schedule leading into the Australian Open, including an short-lived trip to the US PGA Tour qualifying school.
"I was in America last week for the Tour school and it did not work out the way I would have liked," he said.
"I pulled the pin early and got back on Monday morning to give myself an extra couple of days to get ready for this week."
Fraser is fighting back from career-threatening neck surgery in 2010 and is on the cusp of the world's top 50 after enjoying a career-best year in Europe.
"The surgeon replaced a disk in my neck, put an artificial disc in there, a carbon fibre cage around the disc and also a metal plate," Fraser said of his operation.
Apart from winning the Stonehaven Cup, Fraser is looking at the bonuses involved in winning the Australian Open and edging closer to the top 50.
"I am already in the British Open for next year after finishing top 30 in Europe this year," he said.
"Hopefully I can sneak a few more WGC (World Golf Championships) events and the US Open. If I play well this week and next week (at the Australian PGA), the US Masters is a chance."
Jones, who is a 12-time winner on the Japan Golf Tour, is enjoying being back on the PGA Tour of Australasia.
"I'm normally in Japan at this time of the year, hopefully I can show my friends and family that just because I play well in Japan doesn't mean I don't play well anywhere else," he said.
Eight-time Major champion Tom Watson squeezed into the weekend rounds after shooting four-under 68 to beat the halfway cut of four-over 148.
But Chinese 14-year-old prodigy Guan Tianlang, who is the youngest player ever to qualify for the US Masters, missed out after a two-under 70 following on from his disastrous 10-over in the opening round.
Scores after the second round of the OneAsia co-sanctioned Australian Open at the par-72 The Lakes course on Friday (Australia unless stated):
138 - Marcus Fraser 69-69
139 - Brendan Jones 68-71, John Senden 66-73
140 - Nick Cullen 70-70
141 - Steven Jones 73-68, Mathew Goggin 71-70, Justin Rose (ENG) 68-73, Gareth Paddison (NZL) 68-73, Richard Green 68-73, Cameron Percy 72-69
142 - Rory Hie (INA) 73-69, Marc Leishman 70-72, Kieran Pratt 71-71, Brett Rumford 73-69, Stephen Allan 69-73
143 - Rodney Pampling 74-69, Andre Stolz 72-71, Peter Senior 75-68, Josh Geary (NZL) 70-73, Matthew Jones 71-72, Michael Hendry (NZL) 72-71, Paul Spargo 70-73, Kim Felton 68-75, Adam Scott 72-71, Kyle Stanley (USA) 72-71, Stuart Appleby 70-73, Leigh McKechnie 72-71
Selected scores
144 - Liang Wenchong (CHN) 73-71
146 - Tom Watson (USA) 78-68
147 - Zhou Guo-Wu (CHN) 74-73
149 - Zhang Xin-Jun (CHN) 73-76, Garrett Sapp (USA) 75-74
150 - Zheng Ouyang (CHN) 74-76
151 - Joon-Woo Choi (KOR) 75-76
152 - Guan Tianlang (CHN) 82-70, Park Hyo-Won (KOR) 80-72, Kim Do-Hoon (KOR) 77-75, Choi Seong-Jin (KOR) 77-75
153 - Supravee Phatam (THA) 73-80, Andy Zhang (CHN) 76-77
155 - Ou Zhi-Jun (CHN) 80-75, Yi Cao (CHN) 79-76, Marcel Schneider (GER) 78-77, Mu Hu (CHN) 74-81, Choo Tze-Huang (SIN) 74-81
156 - Tanutchan Puaktes (THA) 73-83, Pravee Visalkt (THA) 77-79
157 - He Ze-Yu (CHN) 78-79
158 - Ren Han (CHN) 76-82
159 - Jin Da-Xing (CHN) 84-75
160 - Da Quan (CHN) 80-80
161 - Son Joon-Eob (KOR) 81-80, Park Min-Jun (KOR) 81-80, Liu Yu-Xiang (CHN) 78-83
164 - Jason Kang (USA) 81-83, Jian Chen (CHN) 83-81
166 - Park Sung-Hyuk (KOR) 84-82
168 - Li Xin-Yang (CHN) 91-77
Halfway cut made at +4 (148), 69 players made the cut