* Solid China manufacturing reports limit share losses
* Dollar index hits two-week peak after U.S. data suggests economy resilient
* Euro remains under pressure after biggest fall vs dollar in 6 months
TOKYO, Nov 1 (Reuters) - Asian shares sagged on Friday though upbeat signals on China's manufacturing activity limited losses, while the dollar pushed higher after upbeat U.S. data led some investors to price-in a less dovish stance at the U.S. Federal Reserve.
China's manufacturing sector grew at the fastest in 18 months in October, with the official Purchasing Managers' Index (PMI) rising to 51.4 last month from September's 51.1, beating economists' consensus forecast of 51.2.
The final HSBC/Markit Purchasing Managers' Index (PMI) came in at 50.9, up from 50.2 in September and unchanged from a preliminary flash estimate released last week.
MSCI's broadest index of Asia-Pacific shares outside Japan fell about 0.2 percent, while Australian shares gave up 0.2 percent, but still remained just shy of five-year highs. Japan's Nikkei stock average erased early gains and dropped 0.6 percent.
U.S. S&P E-mini futures edged up 0.1 percent, after the S&P 500 Index closed down about 0.4 percent but still gained 4.5 percent for the month.
Later on Friday, the U.S. ISM survey of manufacturing for October could offer investors a fresh signal on the Fed's future course.
"If the ISM report is better than expected, it could add to revived tapering expectations, and U.S. yields and the dollar could go up and stocks could go down," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
Data on Thursday showed the pace of business activity in the U.S. Midwest jumped more than expected in October, soothing some worries about sluggish fourth-quarter growth after last month's federal government shutdown.
A decline in new jobless claims in the latest week also added to evidence that the economy weathered the shutdown. New claims fell by 10,000 to 340,000, just above the average estimate of 339,000.
Still, not all investors or economists were convinced that the latest U.S. data heralded a shift in monetary policy expectations.
"The existence of noise in the October data will likely make it difficult for the Fed to gather enough evidence to start tapering in December," strategists at Barclays wrote in a note to clients, adding that they still to expect the central bank to begin reducing its current $85 billion monthly bond purchases in March 2014.
PRESSURE ON EURO
The euro remained under pressure after plunging in the previous session as euro-zone inflation dropped to its lowest rate in nearly four years, heightening expectations that the European Central Bank will further ease its monetary policy.
The euro dropped about 0.3 percent to $1.3545, moving away from a two-year peak of $1.3833 set one week ago. On Thursday, it suffered its biggest one-day fall against the greenback in six months, tumbling 1.1 percent.
Data on Thursday showed euro-area inflation slowed to a four-year low of 0.7 percent last month, far below the ECB's target of just under 2 percent. Other data showed unemployment held at record highs in September.
The dollar index, which measures the greenback against six major currencies, was on track for a sixth session of gains, rising 0.3 percent to 80.398 after touching a two-week peak of 80.418 and pulling further away from a nine-month trough of 78.998 hit one week ago.
Against the Japanese currency, the dollar was about 0.2 percent lower on the day at 98.18 yen.
In commodities trading, gold steadied but was still trading close its lowest in nearly two weeks, hurt by sharp losses in the previous session from month-end profit-taking, the strong U.S. economic data and the higher dollar. Spot gold edged up 0.1 percent to $1,326.53 an ounce, after sliding 1.4 percent on Thursday.
Brent crude for December was slightly lower at$108.80 a barrel, while U.S. crude also edged down to $96.34.