* MSCI Asia ex-Japan jumps 1 pct, Australia outperforms
* China shares rebound from sell-off
* Dollar/yen slips on sell-the-fact as BOJ candidates face hearings
* RBA keeps rates unchanged as expected, Aussie hits day's high
* European shares likely climb
By Chikako Mogi
TOKYO, March 5 Asian shares rebounded sharply on Tuesday, reclaiming most of the previous day's steep losses triggered by slumping Chinese stocks, as a globally accommodative monetary stance helped revive risk appetite.
European markets are also seen climbing, with financial spreadbetters predicting London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX would open up as much as 0.6 percent. A nearly flat showing in U.S. stock futures pointed to a subdued Wall Street start.
The MSCI's broadest index of Asia-Pacific shares outside Japan jumped 1 percent after tumbling 1.3 percent when Chinese shares dived on concerns Beijing's move to tighten the housing market could weigh on growth on Monday.
China shares rebounded from a two-month closing low, lifting Hong Kong markets up 0.1 percent, as worries about policy tightening ebbed after the central bank refrained from draining funds following a sharp dip in rates in the money market. Shanghai shares rose 0.9 percent.
The latest data confirmed a modest rebound in the world's second-biggest economy this year, with the private February HSBC Services Purchasing Managers' Index (PMI) falling to 52.1 from January's 54.0, after seasonal adjustments.
Beijing pledged to boost fiscal spending in a bid to deliver economic growth of 7.5 percent this year, with outgoing Premier Wen Jiabao setting out a reform plan as China's annual parliament meetings got under way on Tuesday.
"The Chinese economy will decelerate from the second quarter, but the slowdown is not significant enough to derail the economic recovery," said Dariusz Kowalczyk, senior economist and strategist for non-Japan Asia at Credit Agricole CIB in Hong Kong, adding that Monday's sell-off in Chinese shares was "justifiable" because markets tend to move ahead of growth direction.
"As property curbs are expanded, real estate construction may well slow to the point of adding additional downward pressure on the economy. However, the 7.5 percent growth target announced today is safe," he said.
Australian stocks outperformed their Asian peers with a 1.3 percent rally, with financials and consumer staple shares leading gains after healthy retail figures and export data supported an upbeat outlook for the economy.
The Reserve Bank of Australia kept its cash rate at a record low 3.0 percent as expected, boosting the Australian dollar to its day high of $1.0254.
The RBA kicked off a series of monetary policy meetings taking place this week. Major central banks around the world are expected to maintain a dovish stance, given fragile economic conditions, political uncertainties in Europe, and U.S. budget wrangling. Analysts also say none of the uncertainties is seen as a risk serious enough to trigger a financial crisis.
Janet Yellen, the Federal Reserve's vice chair, said on Monday the U.S. central bank's aggressive monetary stimulus is warranted given how far the economy was operating below its full potential.
"Despite spending cuts in the U.S., a lack of any kind of political resolution in Italy and weaker data in Asia, we just can't get a proper 'risk-off' mood going ... as mad money (quantitative easing and zero interest rate policy) trumps every other concern," said Kit Juckes, strategist at Societe Generale in a note to clients.
Japan's Nikkei stock average closed up 0.3 percent, after earlier scaling a fresh 53-month high.
The dollar slipped 0.5 percent against the yen to 92.96 yen on what traders see as "sell-the-fact" behaviour after candidates for two Bank of Japan deputy governor posts faced parliamentary confirmation hearings.
Expectations that the new BOJ regime, to start later this month, will take much bolder reflationary measures pushed the benchmark 10-year Japanese government bond yield down as low as 0.585 pecent earlier, its lowest since June 2003.
Aside from the Chinese government's action to cool the overheated property market, there is concern about U.S. growth slowing after the automatic "sequestration" spending cuts were allowed to kick in starting March 1.
Ongoing political turmoil in Italy also remains a potential risk as last month's inconclusive election could pave the way for another vote within months. But expectations the European Central Bank would use its scheme to help fund struggling euro zone nations underpinned investor confidence.
The euro held steady around $1.3040.
The ECB holds its policy meeting on Thursday, and while few expect the central bank to cut interest rates this week, many see such an action to come sooner than later.
Later in the week the BOJ and the Bank of England hold their meetings.
Spot gold added 0.5 percent to $1,581.30 an ounce, snapping a four-day losing streak.
U.S. crude was up 0.3 percent at $90.38 a barrel while Brent rose 0.4 percent to $110.53.
"I would call this move in the oil markets as bargain hunting rather than any change in the outlook," said Ker Chung Yang, senior investment analyst at Phillip Futures in Singapore.