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* MSCI Asia ex-Japan steady, Nikkei hits fresh 4-1/2-year peak
* Dollar near 3-1/2-year high against yen after solid jobs data
* Mixed China data curb demand for riskier assets
* European shares likely inch up
By Chikako Mogi
TOKYO, March 11 (Reuters) - The dollar held near multi-year highs against the yen on Monday after surprisingly strong U.S. labour data, but demand for riskier assets was curbed by a mixed bag of Chinese data which pointed to a patchy recovery in the world's second-largest economy.
Commodities prices were caught between growing optimism about more solid demand as the global economy improves and the strengthening dollar, which makes dollar-denominated commodities more expensive for non-dollar holders.
U.S. stock futures were little changed, pointing to a steady Wall Street start.
The MSCI's broadest index of Asia-Pacific shares outside Japan held steady but was weighed down by a 0.1 percent drop each in South Korean shares and Shanghai shares.
Chinese economic indicators released over the weekend signalled a looming dilemma for policymakers, as inflation stood at a 10-month high in February while factory output and consumer spending were weaker than forecast.
"China's macro picture is getting better but there's still a lot of uncertainty, especially on the details of the public policy to be released this week," said analyst Bonnie Liu of Macquarie in Shanghai.
Australian shares rose 0.5 percent, hitting a fresh 4-1/2 year high led by financials after the Dow Jones industrial average posted its fourth consecutive record high close on Friday, but weaker metal prices hit mining companies. The commodity-linked Australian dollar eased 0.1 percent to $1.0221.
In Seoul, investors were jittery amid intensifying tensions with North Korea and as further weakness in the yen threatens South Korean exporters.
The yen's slide bolstered Japanese equities, with the Nikkei stock average closing up 0.5 percent after hitting a fresh 4-1/2-year high.
FUNDAMENTALS BOOST DOLLAR
U.S. nonfarm payrolls jumped by 236,000 jobs last month, above forecast for a 160,000 gain, while the unemployment rate fell to a four-year low of 7.7 percent from 7.9 percent.
The data was unlikely to prompt the Federal Reserve to change its policy settings anytime soon as the U.S. central bank has said it will keep its near-zero rate stance until the unemployment rate falls to 6.5 percent, as long as inflation does not threaten to top 2.5 percent.
But brighter growth prospects underpinned the dollar.
"As both Europe and Japan look to continue with easy monetary policy, improving economic indicators in the United States make it likely that the U.S. would be the first to depart from global accommodative conditions, putting upward pressures on yields and supporting the dollar," a senior official at a Japanese institutional investor said.
"It's too early yet to say the current dollar buying based on solid U.S. fundamentals is sustainable. Effects from U.S. spending cuts may start to weigh on growth later on and undermine the dollar," he said.
The dollar was up 0.1 percent against the yen at 96.06 , near Friday's peak of 96.60 yen, its highest since August 2009. The euro was trading up 0.2 percent at 124.98 yen, off a high of 125.98 yen touched on Friday.
"Much of the recent move in the U.S. dollar is a reflection of more fundamental money flows out of the yen and out of the euro concurrently, and that is enough of an effect -- a truly massive effect -- to nudge the dollar higher," said Richard Hastings, macro strategist at Global Hunter Securities.
"This is of course a big change from forex conditions years ago."
Currency speculators boosted their bets in favour of the U.S. dollar in the latest week to the highest in over seven months, while also raising short positions in most other major currencies, such as the yen, the euro and sterling, data from the Commodity Futures Trading Commission showed on Friday.
A report on data flows from EPFR Global sent mixed signals about investors' risk appetite.
Money flowed out of funds tied to gold and cash, and equity funds outgained bond funds overall, while alternative funds and high yield bond funds saw strong inflows. But emerging market equity and bond funds struggled.
U.S. crude was down 0.2 percent at $91.74 a barrel while Brent fell 0.3 percent to $110.47.
London copper inched up 0.1 percent to $7,749.75 a tonne.
Spot gold edged up 0.2 percent to $1,581.16 an ounce, off a two-week low hit after the U.S. jobs data, as the Fed was seen retaining its monetary stimulus.