GLOBAL MARKETS-Asia stocks edges up on China rate cut, dollar index at 11-yr high

* MSCI’s Asia-Pacific stock index up 0.1 pct after China rate cut

* Spreadbetters expect mixed open for European bourses

* Australian shares hit 7-year high after China eases

* But overall risk asset impact from China cut limited

* Yuan sags vs greenback, dollar index hits 11-year high

By Shinichi Saoshiro

TOKYO, March 2 (Reuters) – Asian stocks edged higher on Monday as China’s weekend interest rate cut partially offset soft U.S. data, while the dollar hit an 11-year high against a basket of currencies.

China on Saturday stepped up its easing tempo and cut its lending and deposit rates as the world’s second largest economy tries to ward off deflation.

Australian shares posted some of the biggest gains in Asia following the China rate cut, gaining 0.6 percent after touching a seven-year peak as resource shares surged.

But the impact from the weekend easing was limited on the region’s overall markets.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose a modest 0.1 percent. Tokyo’s Nikkei crawled up 0.3 percent. The Shanghai Composite Index edged up 0.3 percent while Malaysian and Thai shares slipped.

While the previous rate cut in late November triggered a 26 percent surge in Chinese shares over the following month, investors appeared less excited this time around.

“It’s not a surprise,” said Wu Kan, head of equity trading at investment firm Shanshan Finance in Shanghai. “It’s a slow bull (market) now, not the kind of crazy bull we saw last year.”

The Aussie, a proxy of China growth-related trades, climbed to $ 0.7850 early in the session before impact from the China rate cut faded and was last trading at $ 0.7767, down 0.6 percent.

“In some senses this rate cut is a technical response to the fact that lower inflation is making real borrowing costs more expensive in China,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

Equity markets were also cautious after revised data on Friday showed U.S. gross domestic product expanded at a slower pace in the fourth quarter than initially thought, and the University of Michigan’s final February reading on U.S. consumer sentiment slipped from an 11-year high but topped expectations.

Spreadbetters expected a mixed open for European bourses, forecasting Britain’s FTSE and France’s CAC to open a touch lower but calling for Germany’s DAX to start slightly higher.

In currencies, China’s yuan fell to its lowest level against the dollar since October 2012 after the country’s central bank cut rates.

The dollar was up 0.2 percent at 119.88 yen after rising to a three-week high of 119.955. It gained about 0.6 percent last week when upbeat U.S. data helped revive prospects of an early interest rate increase by the Federal Reserve.

The euro hovered near a five-week low of $ 1.1160. The greenback’s broad strength helped the dollar index rise to as high as 95.505, a peak not seen since September 2003.

In addition to the all-important U.S. non-farm payrolls data on Friday, the key focus this week will be the European Central Bank (ECB) meeting on Thursday. Investors keenly await further details on its 1 trillion euro ($ 1.1 trillion) government bond-buying programme, which begins this month.

U.S. crude fell 36 cents to $ 49.40 a barrel after Friday’s $ 1.59 surge petered out. Last month, U.S. crude posted the first monthly gain since June thanks to an improving demand outlook and supply outages.

Three-month copper on the London Metal Exchange hovered within distance of a two-month high of $ 5,944 a tonne struck last week as China’s rate cut fed hopes of increased demand from the metal’s top user.

(Additional reporting by Samuel Shen and Pete Sweeney in Shanghai; Editing by Shri Navaratnam, Eric Meijer and Simon Cameron-Moore)