RPT-GLOBAL MARKETS-Asia stocks snap 4-day fall, US debt drops

* Asia stocks up 0.7 pct

* But set for biggest weekly drop since Feb

* Many markets drifting as Q2 winds down, volumes dwindle

* Asia bonds resilient, Treasuries slide further (Repeats item to more subscribers without changes in text)

By Eric Burroughs

HONG KONG, June 19 (Reuters) - Asian stocks snapped a four-day slide on Friday and government bond yields climbed after upbeat U.S. factory and jobs data provided more evidence that the global economy is recovering from its deep recession.

European shares open slightly higher <.FTEU3> <.FTSE>.

A slowing pace of contraction in the Philadelphia Federal Reserve's regional gauge of manufacturing and a rise in the expectations index to its highest since September 2003 -- when the U.S. economy was healing from its last recession -- comforted investors. [ID:nN18379372]

The rise in Asian equity markets mirrored that on Wall Street the previous day, lifting higher-yielding currencies even as many market players turned cautious towards the end of the second quarter.

Analysts said that while the latest economic news out of the United States was a clear positive, the road to recovery was likely to be a long slog.

"U.S. economic data is pointing to an end to the U.S. recession. Good news? Absolutely. But unfortunately the end of recession does not mean the end of pain," said Patrick Bennett, Asia FX and interest rate strategist at Societe Generale in Hong Kong.

The April-June quarter has been a bumper one for portfolio managers on mounting signs the worst of the recession had passed, with Asian stocks outside Japan up 28 percent so far and poised for their biggest quarterly gain in 16 years.

The MSCI index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> edged up 0.7 percent but was down 5 percent on the week, which would be the biggest such drop since late February -- just before the stock market's rally began in March.

Since the lows hit in early March, the MSCI benchmark of Asian shares has soared nearly 50 percent.

The Shanghai Composite index <.SSEC> climbed 0.4 percent and hit an 11-month peak but lagged gains elsewhere in the region as the first initial public offering since September came to the market, the start of an expected wave of issues. [ID:nSHA94557]

Investors are keeping an eye out for sharp market moves towards the end of the quarter, with the hefty gains for riskier assets likely spurring profit-taking as hedge funds and asset managers close their books.

Later on Friday, June U.S. stock futures and options will expire, and many positions will be rolled into September contracts -- another potential spark for sudden moves.

Futures on the U.S. S&P 500 were up 0.2 percent in Asia after the index rose nearly 1 percent on Thursday.

BONDS HIT BUT DOLLAR DRIFTS

Asian bond markets proved resilient to the drop in U.S. Treasuries the previous day on the surprisingly good economic figures.

U.S. bond dealers were also spooked after the Treasury said it would sell a record $104 billion of debt next week, the latest massive auction to fund stimulus spending. [ID:nN18396977]

Ten-year Japanese government bonds reversed early losses, with yields dipping half a basis point to 1.445 percent.

Treasuries extended losses in Asia, pushing benchmark 10-year yields up 2 basis points to 3.840 percent on top of the 12-basis point spike on Thursday.

Currencies were little changed in choppy trade.

The dollar index, a gauge of its performance against six major currencies, was steady at 80.519 <.DXY> and holding small gains on the week after recovering from a seven-month low struck earlier in the month.

Against the yen, the dollar edged up 0.3 percent to 96.90 yen . The Australian dollar was the biggest riser against the yen, up 0.6 percent to 77.70 yen

Crude oil prices added 21 cents to $71.58 a barrel and held just below a seven-month high on the U.S. data and on worries about supply from OPEC member Nigeria. Gold was flat near $932.40 .