* MSCI Asia ex-Japan dips 0.3 pct, holds up vs U.S. market
* S.Korea's KOSPI up 0.6 pct on tech and pharmaceutical gains
* Oil and copper extend fall, but Aussie dollar climbs
* JGB 10-yr yield hits 3-mth low
* Japan investors buy Treasuries (Repeats item to more subscribers without changes in text)
By Eric Burroughs
HONG KONG, July 3 (Reuters) - Asian stocks retreated on Friday and the dollar edged up after a disappointingly big drop in U.S. employment prompted investors to pull back from commodities and resource-linked shares.
But the equity market decline across Asia was limited as the report showing that U.S. companies slashed nearly half a million jobs in June did not shake hopes that a slow recovery is under way. [ID:nN02549309]
European shares were poised for a slight bounce in early
trade, with futures on the Dow Jones Eurostoxx 50
The Australian dollar, whose 12 percent surge against the U.S. dollar this year has been closely tied to the four-month rally in stocks, bounced back from a slide the previous day as the U.S. payrolls report had limited fallout.
Analysts at Rabobank said the U.S. jobs report was a "reality check" for investors who had become overly optimistic about how quickly the global economy could recover from its deepest recession in decades.
Oil and copper extended their slide. U.S. crude struck a
one-month low and was down 2 cents a barrel at $66.71
"U.S. jobs data dented brewing hopes of an economic turnaround, but share losses were limited as investors here did not necessarily take it as a sign of a further slowdown of global economies," said Won Jong-hyuck, a market analyst at SK Securities in Seoul.
The MSCI index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> dipped 0.3 percent and was down 0.6 percent during the first three trading days of the third quarter.
In the April-June quarter, the MSCI benchmark for Asian shares surged 32 percent -- its biggest quarterly gain since 1993 -- on investor hopes that Asia's emerging economies would help lead the global economy out of the doldrums.
Data from fund tracker EPFR Global showed that global emerging markets received a record amount of funds in the second quarter. China-focused funds took in $3.8 billion, while Asian funds excluding Japan took in more than $23 billion.
Japan's Nikkei average <.N225> shed 0.6 percent, dragged down by a 5 percent slide in Seven & I Holdings <3382.T> when the operator of department stores and supermarkets reported an unexpected drop in quarterly profit. Other Japanese retailers also lost ground.
The pull-back in energy prices knocked down shares of oil distributor Nippon Oil <5001.T> by 2 percent.
Asian stocks held up relatively well after the U.S. S&P 500 <.SPX> slid 2.9 percent on the jobs data.
U.S. markets are closed on Friday in observance of the Independence Day holiday on Saturday.
In currencies, the dollar edged up as investors favoured the greenback as a safe haven while positions in riskier currencies and assets were cut.
The dollar index, a gauge of its performance against six major currencies, rose a tad to 80.22 <=USD>.
The euro was little changed at $1.4010
The Australian dollar climbed nearly 1 percent to $0.7987
The worries about the recovery outlook added fuel to gains in government bonds.
The 10-year JGB yield
Japan's low yields have prompted domestic investors to go abroad in search of higher returns.
Data from the Ministry of Finance on Thursday showed domestic investors snapped up 1.53 trillion yen ($16 billion) of foreign bonds in the weekend ending June 27, the biggest such weekly purchases in four years. Analysts said those purchases were mainly concentrated in U.S. Treasuries.
Benchmark U.S. Treasury yields are about 2.2 percentage points above JGB yields, holding near their widest gap in eight months and making them attractive to Japanese investors.
Japanese household investors have also been hefty buyers of new mutual funds targetting foreign assets, keeping yen gains in check as the money flows abroad.