* MSCI Asia-Pacific index up 0.1 pct, Nikkei rises 0.2 pct
* Asia stocks stretch gains but stalling Wall St caps rise
* Dollar dips on worries over possible US government shutdown
* US lawmakers try to cobble together deal to avert shutdown
By Shinichi Saoshiro
TOKYO, Jan 19 (Reuters) - Asia stocks edged higher on Friday and were within reach of record highs, although losses on Wall Street slowed the advance, while worries over a possible U.S. government shutdown weighed on the dollar.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.1 percent. The index was poised for a 1 percent gain on the week, during which it rode a surge in global equities and climbed to a record high on Thursday.
Optimism over the global economic growth outlook and improved corporate earnings have helped share markets rally at the start of 2018. Supporting economic confidence was data on Thursday that showed China’s growth in 2017 accelerated for the first time in seven years.
Australian stocks were mostly flat, South Korea’s KOSPI climbed 0.1 percent and Japan’s Nikkei rose 0.2 percent.
“We are likely to see equity markets go through temporary adjustment phases. But in the longer term, it looks to be a good year for global markets,” said Soichiro Monji, chief strategist at Daiwa SB Investments in Tokyo.
“It is no longer about other markets following gains by U.S. equities. Fundamentals are strong globally, backed by major positive changes, such as the digital revolution we are currently witnessing.”
Wall Street fell on Thursday as losses in industrials and interest-rate sensitive sectors offset marginal gains in tech stocks. The Dow slipped 0.37 percent, dipping from record highs.
Against the yen, the dollar was 0.15 percent lower at 110.960. It rose to as 111.480 on Thursday before slipping on concerns over a possible U.S. government shutdown as lawmakers struggled to cobble together a federal budget deal.
Focus was on whether lawmakers can reach at least a temporary agreement to fund government operations by a deadline set on Friday.
U.S. House Republicans cited progress in averting a government shutdown. A House vote on the funding extension is expected after 1930 GMT.
The euro was steady at $1.2240 after gaining about 0.45 percent overnight.
The common currency had advanced to a three-year peak above $1.2300 earlier this week on expectations that the European Central Bank would take steps towards winding back on stimulus measures to normalise monetary policy. The euro’s rally was tempered later after some ECB officials voiced worries about the currency’s strength.
The dollar index against a basket of six major currencies was flat at 90.495. It had fallen to a three-year trough of 90.113 on Thursday and poised to lose 0.5 percent on the week.
The Australian dollar rose 0.15 percent to $0.8012, crawling back toward a four-month high of $0.8023 set on Wednesday and the New Zealand dollar was little changed at $0.7298.
U.S. crude oil futures slipped 0.5 percent to $63.64 per barrel.
Oil prices soared to a three-year peak near $65.00 on Tuesday, supported by supply cuts led by the Organization of the Petroleum Exporting Countries. But the advance has stalled as the market remains wary that output cuts will eventually trigger price hikes and lead to increased supply from shale-rich United States.
Spot gold nudged up 0.05 percent to $1,327.45 an ounce as the dollar eased. The precious metal had risen to a four-month top of $1,344.43 on Monday on the back of the dollar’s sharp downturn.
Reporting by Shinichi Saoshiro; Editing by Sam Holmes