By Chikako Mogi

TOKYO (Reuters) - Asian shares recovered but the dollar stayed pressured on Friday after lackluster U.S. data eased concerns about an early end to the Federal Reserve's strong stimulus program which has sharpened investor appetite for risk.

Global markets rose overnight as U.S. GDP grew a slightly less-than-expected annualized 2.4 percent in the first quarter, new jobless benefits claims rose in the latest week, and pending home sales grew far less than expected in April, pointing to a fragile economy which still requires support from monetary policy.

MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> steadied from the previous day's drop to a six-week low. With a fall of about 4 percent so far in May, the index was set for its worst monthly performance in a year.</.miapj0000pus>

Australian shares <.axjo> inched up 0.1 percent after touching their lowest in nearly two months the previous session while South Korean shares rose 0.3 percent.</.axjo>

"The market is slowly gathering upside momentum, helped by a view that the likelihood of the U.S. Federal Reserve abruptly pulling its stimulus program is small," said Han Beam-ho, a market analyst at Sinha Investment Corp, of Seoul shares.

Bourses in Shanghai, Hong Kong, Jakarta and Manila Philippines were lower.

Japanese equities also staged a rebound after tumbling more than 5 percent to a five-week low on Thursday as exporters took a hit from the dollar's fall against the yen.

The Nikkei stock average <.n225> gained 1.6 percent after sliding sharply last week from a 5-1/2-year peak.</.n225>

Analysts said the recent correction presents an opportunity for investors to re-enter the market at better levels.

"It's not a bear market, it's just a correction," said Kenichi Hirano, a strategist at Tachibana Securities. "The index has broken below its 25-day moving average, and it's a comfortable level to buy back."

The dollar fell to a three-week low of 100.46 yen on Thursday and its index <.dxy>, measured against a basket of six key currencies, also touched a three-week low, having hit its highest since July 2010 of 84.498 just a week ago. The dollar index was stable on Friday and the dollar rose 0.3 percent against the yen to 101.02.</.dxy>

CORRECTION FROM OVERSHOOT

The Nikkei had raced ahead and overshot even relative to the rapid rate of yen selling, which was inspired by expectations for bold reflationary measures by the Bank of Japan, so corrections to Japanese stocks may be steeper than the change in currencies. In the past week, the Nikkei shed 15 percent compared to the dollar's 3 percent drop against the yen.

"Given the fact that markets embraced a sliding yen as a sign that central bank intervention continued to offer a sizable tailwind for equities, we have to raise the red flag on what if it doesn't - at least until it does again?," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York, in a note to clients.

"We must acknowledge that there are several headwinds brewing that could trip up investors."

The heightening volatility in Japanese equities and the yen had come hand-in-hand with the surge in benchmark 10-year Japanese government bond yields to a one-year high.

The jump in JGB yields was partly in line with rising U.S. yields but it also underscored the risk of putting too much confidence in the BOJ's aggressive bond buying plan alone to contain increases in Japanese yields, said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute.

"The Japanese government's growth strategy plan due to be unveiled early next month will play a significant role in determining market trends going forward," Kumano said.

The euro recovered the $1.30 level and reached a three-week high on Thursday, encouraged by the bigger-than-expected improvement in the European Commission's economic confidence survey, showing a pick-up in morale in the euro zone's five largest economies.

Commodities remained generally top-heavy.

"Commodities tend to move in tandem with the dollar, so if speculation about an eventual shift in the Fed's stance pushes U.S. yields higher and the dollar rises, that would generally cap commodities prices," said Bob Takai, general manager of Sumitomo Corp's energy division in Tokyo.

U.S. crude futures were steady around $93.65 a barrel and Brent was up 0.1 percent to $102.28.

Spot gold was up 0.3 percent to $1,418.11 an ounce, helped by the dollar's soft tone.

(Additional reporting by Jungyoun Park in Seoul and Ayai Tomisawa in Tokyo; Editing by Eric Meijer)

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