* Fed minutes show officials concerned about "overreaction" in markets
* Ex-Japan Asian shares at five-month high
* Dollar index near March low, U.S short-term yields near 3-week low
* Markets take soft China data in stride
* Euroean shares seen rising, German DAX could gain 0.3 pct
TOKYO, April 10 (Reuters) - Asian shares hit five-month highs on Thursday as investors welcomed minutes of the Federal Reserve suggesting that policymakers will be more cautious towards raising interest rates than markets had thought.
Riskier assets also took in stride gloomy Chinese exports data as analysts said the numbers were likely to be distorted by over-invoicing last year to skirt tight capital controls.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent, closing in on its five-month peak in October, while Japan's Nikkei pared earlier gains to end flat.
European shares are seen opening up, with both Germany's DAX and France's CAC seen rising as much as 0.3 percent and Britain's FTSE up 0.2 percent.
The minutes of the Federal Reserve's March meeting showed officials fretted that investors would overreact to policymakers' latest views on interest rates that appeared to map out a more aggressive cycle of rate hikes than was actually anticipated.
"It's not so much that the Fed was dovish but the Fed has turned out not to have become hawkish. People were nervous as it was the first meeting under Yellen," said Tohru Yamamoto, chief fixed income strategist at Daiwa Securities.
The perceived dovish tone of the minutes lifted all three major U.S. stock indexes more than 1 percent, with recently battered Internet and biotech stocks among the day's biggest gainers.
It also sparked a wave of buying of short- and intermediate-term government debt, pushing yields to their lowest levels in three weeks.
Investors are pushing back expectations of the Fed's first rate increase to late 2016, with federal funds futures now pricing it around October, compared to around August about a week ago.
As lower short-term rates and bond yields typically reduce the relative attraction of a currency against others, the dollar came under broad pressure.
The dollar index stood at 79.52, within sight of 79.268 hit on March 13 and its 2013 low around 79.00 hit twice last year.
The euro traded at $1.3850, having recovered from a five-week low of $1.3705 hit last Friday after fairly upbeat U.S. employment data.
The dollar fetched 101.88 yen, near Tuesday's three-week low of 101.55 yen, while the British pound edged near its four-year peak hit on Feb 17.
In Asia, a standout performer was the Korean won, which hit a more than 5-1/2-yr high, rising as much as 1.6 percent in the last two sessions after a major chart break, supported in part by strong inflows from offshore funds.
Chinese shares held near a seven-week high hit the previous day even after the surprisingly weak trade data as investors expect the government to continue to take steps to prop up the economy.
The Australian dollar also held near a five-month high of $0.9309, helped by firm local job data.
Elsewhere, Indonesian shares and the rupiah currency fell a day after the main opposition party failed to win enough votes in parliamentary elections to nominate hugely popular Jakarta governor Joko Widodo for the presidency without the help of other parties.
Oil prices were firm, helped by unexpectedly high U.S. gasoline demand as well as tensions between Russia and the West amid unrest in eastern Ukraine.
U.S. crude futures stood at $103.23 per barrel, having risen as high as $103.77 on Wednesday, the best level since early March. (Editing by Jacqueline Wong & Shri Navaratnam)