* MSCI Asia index snaps losing streak but still down on week * Nikkei surges as yen falls to more than two-week low vs dlr * Upbeat manufacturing data hints at global recovery * Concerns remain about impact of Fed stimulus withdrawal By Lisa Twaronite TOKYO, Aug 23 Asian shares marked an upbeat end to a mostly grim week on Friday as economic data suggesting the global economy is improving took the edge off persistent fears that the U.S. Federal Reserve will start withdrawing stimulus next month. European stocks were seen rising, with financial spreadbetters expecting Britain's FTSE 100 to open around 18 points higher, or up 0.3 percent; Germany's DAX to open 32 points higher, or up 0.4 percent; and France's CAC 40 to open 12 points higher, or up 0.3 percent. MSCI's broadest index of Asia-Pacific shares outside Japan finished up 0.6 percent, bouncing decisively off a six-week low touched on Thursday and snapping a six-session losing streak, its longest since March 2012. Still, it looked set to end down 3.1 percent for the week, its worst in nine weeks. Japan's Nikkei stock average outperformed, surging 2.2 percent, as a weaker yen gave a tailwind to exporters' shares. The Nikkei eked out a weekly gain of 0.1 percent, up for the second straight week, although market participants said Friday's rally was not necessarily a harbinger of a major shift in sentiment. "It doesn't look like investors are going long. It's merely short-covering, but compared to a few days ago when fears about emerging countries weighed, we are finally seeing bright signs in the world economy," said Isao Kubo, equity strategist at Nissay Asset Management in Tokyo. Asian gains tracked those in overseas markets in the previous session. European shares registered their best session since early this month and all three U.S. indexes ended higher despite a system glitch that stopped trading of more than 3,000 Nasdaq-listed shares for almost three hours. Purchasing managers surveys showed better-than-expected growth in the euro zone, a Chinese manufacturing rebound and U.S. manufacturing activity rising to a five-month high this month. U.S. Labor Department data also showed new claims for jobless benefits held near a six-year low last week, adding to signs that the U.S. labour market is stabilising. But the brighter U.S. data had a dark underbelly that some strategists said would limit market gains, as it reinforced expectations that the economy is strong enough for the Fed to begin tapering its quantitative easing (QE) as early as next month. That could draw more capital out of emerging countries, whose markets have felt the pinch in recent sessions. Singapore Finance Minister Tharman Shanmugaratnam said on Friday that it would not be in anyone's interest for very low global interest rates to continue indefinitely, as this leads to financial imbalances. "The tapering of QE and tightening of U.S. monetary policy, when it eventually occurs, will not be a bad thing for the region's economies," Tharman told a banking conference in Singapore. Some Asian investors are betting that North Asian currencies such as the South Korean won and the Taiwan dollar will fare better than their Southeast Asian counterparts as the Fed pares its stimulus. The Korea Composite Stock Price Index (KOSPI) rose 1.1 percent, paring its weekly loss to 2.6 percent, as some fears about the impact of Fed policy on emerging markets eased. "The market is responding well to the upbeat U.S. and European data, while concerns about India and Indonesia have eased," said Samsung Securities analyst Lim Soo-gyun. DOLLAR EDGES HIGHER The dollar rose about 0.2 percent against a basket of currencies to 81.626. On Thursday, it broke through initial resistance at 81.604, its 200-day moving average, to hit a one-week peak of 81.719. Iydollar rose 0.4 percent against the Japanese currency to 99.09 yen after hitting 99.12 yen earlier on the EBS trading platform, its highest since Aug. 5, while the euro slipped about 0.1 percent to $1.3338. In commodities trading, copper prices dropped 0.3 percent to $7,299 a tonne, but were supported by the Chinese manufacturing data that suggested demand from the world's second-biggest economy and top metals consumer could pick up. Gold slipped slightly to $1,375.44 per ounce, headed for a small loss for the week. The precious metal was also buoyed by the China PMI but was at the same time pressured by upbeat global economic data and expectations that the U.S. Federal Reserve will soon taper its stimulus. Brent crude prices rose 0.2 percent to $110.06 a barrel. Rising political tensions in the Middle East and North Africa have bolstered oil prices this week, even as reports of some Libyan ports readying for exports eased supply concerns.