By Chikako Mogi
TOKYO (Reuters) - Asian shares inched higher and the dollar steadied on Thursday, supported by a pick-up in China's manufacturing sector and a commitment by the U.S. Federal Reserve to maintain an accommodative monetary stance.
The HSBC Purchasing Managers' Index for China revived to 51.7 in March from 50.4 in February, pointing towards solid but not spectacular first-quarter growth in the world's second-largest economy.
The MSCI's broadest index of Asia-Pacific shares outside Japan, rose 0.1 percent with the improving Chinese data helping soothe sentiment rattled by wrangling over a bailout plan for Cyprus.
Hong Kong shares advanced 0.5 percent, wiping out small losses after the data while Shanghai shares entered positive territory to add 0.3 percent after the PMI. The Australian dollar hit a high of $1.0393.
"The HSBC figures were definitely a help," said Guy Stear, head of research with Societe Generale in Hong Kong.
South Korean shares trimmed earlier gains to inch up 0.1 percent while Australian shares gave up gains to fall 0.2 percent.
"External conditions are favourable today, with the Fed sticking to its easy monetary policy and China's PMI data exceeding expectations," said Kang Hyun-gi, an analyst at IM Securities.
The Fed ended a two-day meeting on Wednesday with a pledge to keep its aggressive policy stimulus despite improvements in the U.S. economy, pointing to still-high unemployment, fiscal headwinds out of Washington and risks from abroad.
Fed Chairman Ben Bernanke said the central bank might slow the pace of its bond buying but only after the labour market showed sustained improvement over a number of months.
"There will be reasonable U.S. economic growth this year and the unemployment rate will drift lower. But neither will be sufficient to induce the Fed to take its foot off the gas. The open-ended QE program is set to run into early 2014 at the very least," said Martin McMahon, economist at Commonwealth Bank.
Cyprus deposits graphic: http://link.reuters.com/fuf76t
Japan Trade balance: http://link.reuters.com/vyq65s
China PMI surveys: http://link.reuters.com/qaf92t
DOLLAR RESILIENT
The dollar steadied against a basket of major currencies, and the euro inched up 0.2 percent to $1.2950, off a four-month low of $1.28435 hit on Tuesday. The dollar was around 96 against the yen.
Japan's Nikkei stock average climbed 1.2 percent.
New Bank of Japan governor and his two deputies will hold their inaugural news conference later in the day. They are under pressure to deliver strong reflationary steps as part of Prime Minister Shinzo Abe's drive to end deflation and bolster growth.
Such views sent the 10-year Japanese government bond yield down to its lowest since June 2003 of 0.58 percent.
U.S. stocks rose, and European shares broke a three-day losing streak on Wednesday as investors bet on policymakers finding a fix for a Cyprus bailout.
After rejecting the terms of a European Union bailout, Cyprus is set to resume crisis talks later on Thursday.
"Market participants are probably right to expect a resolution of the immediate crisis that does not destabilize broader European and global financial markets," Barclays Capital said of bailout prospects for Cyprus.
"But the shape of such a compromise is not easy to imagine, and until one emerges, investors had better keep an eye or two on the eastern Mediterranean," it said.
Barclays noted there were still risks the euro zone may opt to keep Cyprus on financial lifeline indefinitely, without taking steps to ensure long-run sustainability, or force the island state out of the euro zone.
U.S. crude futures fell 0.2 percent to $93.35 a barrel while Brent was steady around $108.71.
(Additional reporting by Ian Chua in Sydney; and Somang Yang in Seoul; Editing by Eric Meijer and Sanjeev Miglani)
