* China & Hong Kong shares buoyed by economic & stimulus hopes
* Nikkei at 6-month peak, Seoul highest in over 3 years
* Dollar consolidates gains before US economic news barrage
By Wayne Cole
SYDNEY, July 29 (Reuters) - Asian shares touched fresh three-year highs on Tuesday as investors in the region drew encouragement from a rally in Chinese markets, though caution was warranted given the torrent of U.S. economic news still to come this week.
Hong Kong's key stock index rose 0.5 percent to its loftiest level in over 3-1/2 years on optimism that the economy has turned a corner and as investors wagered on more growth-friendly policies from Beijing.
The charge had been led by Chinese banks after a Reuters report said the country's fifth-biggest bank by assets planned to seek more private investors.
The CSI300 of the leading Shanghai and Shenzhen A-shares added 0.5 percent, bringing its gains to almost 8 percent in seven sessions.
"The recent rally of Hong Kong and China stock markets is pretty much liquidity-driven due to favourable fund flow. And fund flow is maybe because the two markets remain relatively lagging behind in terms of the valuation and performance," said Ben Kwong, director at KGI Asia in Hong Kong.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.33 percent to be just a whisker from a peak last touched in April 2011. Likewise, South Korea's index gained 0.7 percent to its highest since mid-2011.
Japan's Nikkei rose 0.4 percent to a six-month high as investors focused on the positive in mixed economic news.
While household spending and retail sales underwhelmed, the availability of jobs in Japan rose to the highest in 22 years in an upbeat omen for wages and the government's aim of reflating the economy.
Nissan rose 3 percent after the automaker's April-June operating profit rose a higher-than-expected 13.4 percent.
In Europe, financial spreadbetters expected opening gains of 0.1 to 0.2 percent for the FTSE 100 <.FTSE >, DAX and CAC 40.
EURO ON DEFENSIVE
Wall Street had been more restrained as the major indices approached daunting chart barriers. The Dow had ended Monday up 0.1 percent, while the S&P 500 gained a bare 0.03 percent, and the Nasdaq lost 0.1 percent.
Action was also lacking in currencies. The dollar held close to a six-month peak against a basket of its peers, having gone virtually nowhere as investors kept to the sidelines ahead of a policy review by the Federal Reserve.
The Fed is sure to cut its monthly bond-buying program by another $10 billion as it looks to wind up the scheme later in the year, but the focus for markets is on any clues to the timing of its first interest rate hike.
With other key data such as U.S. gross domestic product and the closely watched non-farm payrolls report still to come, investors were content to sit on their hands.
The euro was pinned near an eight-month trough of $1.3421 set on Friday. It traded at $1.3432, having shuffled between $1.3430 and $1.3440.
Against the yen, the dollar edged up to 101.96, while the common currency barely budged at 136.93.
In commodities, gold was idling at $1,304.79 after a very quiet 24 hours saw it hold to an $8 range.
Oil prices dipped as signs of excess supplies of North Sea and West African crude and weak demand in Europe and Asia offset fears of escalating tensions in Ukraine and the Middle East.
September Brent lost 4 cents to $107.53 a barrel, while U.S. crude futures eased 26 cents to $101.41. (Editing by Kim Coghill and Eric Meijer)