GLOBAL MARKETS-Strong China data buoys Asia shares, dollar falls

* Asian shares rise after strong China economic data

* Dollar falls to year low against basket of currencies

* Japanese shares slide as rising yen hurts exporters

By Susan Fenton

HONG KONG, Sept 11 (Reuters) - Asian shares rose on Friday, buoyed by strong Chinese economic data which also boosted commodity prices and sent the dollar to its lowest in a year against a basket of currencies.

Major European stocks futures were up 0.5 percent, and the euro rose to its highest level this year against the dollar above $1.4614, while U.S. equity futures were up 0.9 percent, pointing to a higher start in overseas equities.

China shares <.SSEC> surged 2.2 percent after robust retail, production and investment data for August indicated China's economy is accelerating, even though exports slumped 23 percent, highlighting that global demand remains weak. [ID:nECONCN]

"Real economic growth is extremely powerful and it is sustainable," said Dong Xian'an, chief economist at Industrial Securities in Shanghai.

Beijing said it was confident of reaching its 8 percent GDP growth target this year.

Upbeat signals from Asia's most dynamic economy supported a continued shift by investors into riskier assets, pushing the dollar to its lowest level in a year against a basket of currencies <.DXY>.

The dollar index, which tracks its performance against six major currencies, fell 0.3 percent to 76.553.

Analysts in Australia said Asian central banks might be diversifying out of the dollar.

"Our trading desk has seen significant flows from central banks buying AUD/USD over the past few days, perhaps in a sign that central banks, particularly those based in Asia, are diversifying their reserve base away from the U.S. dollar," said Riki Polygenis, an economist at ANZ bank in Sydney.

The MSCI index of Asia Pacific stocks traded outside Japan <.MIAPJ0000PUS> was up 0.7 percent by early afternoon.

The index is up about 8 percent from its level in mid-September last year before U.S. investment bank Lehman Brothers collapsed, sending global financial markets and economies into a fierce tailspin. But it is still off about 35 percent from its all-time high in late 2007.

Japan missed out on the uptick in Asian shares on Friday as the Nikkei index <.N225> fell 0.7 percent, with exporters including Toyota Motor <7203.T> under pressure as the yen reached a seven-month high of 91.00 yen against the dollar.

Stock investors shrugged off an unexpected downward revision to GDP data, which showed Japan's economy grew by 0.6 percent in the second quarter, down from a preliminary reading of 0.9 percent growth. But the news, along with a surge in U.S. Treasuries, supported Japanese government bonds.

Finance Minister Kaoru Yosano said the downward revision showed Japan's economy had not yet fully recovered.

JAPANESE SHARES FALL

The dollar's decline and half percent rise in oil prices to above $72 a barrel pushed gold up to $1,002.70 an ounce as the yellow metal was seen as a potential hedge against inflation.

The New Zealand dollar hit its highest level since August 2008, rising above $0.7045 as the China data added to hopes for regional economic recovery and demand for high-yield currencies, while copper prices jumped more than 1 percent on the strong Chinese numbers.

In South Korea, treasury bond prices dived for a second day after the Bank of Korea signalled on Thursday that Korea could be one of the first countries in the world to raise interest rates [ID:nECONKR]. The yield on one-year treasury bonds rose 4 basis points to 3.56 percent, its highest level since the end of 2008.

(Additional reporting by Anirban Nag in Sydney; Editing by Kim Coghill)