* MSCI Asia-Pacific index near 10-yr high, Nikkei hits 21-yr peak
* China Q3 GDP expands 6.8 pct as expected, mkt reaction limited
* Market focus on Fed, China's party congress
* Dollar rebounds modestly thanks to spike in Treasury yields
* Brent crude flags after climbing to 3-week high
TOKYO, Oct 19 (Reuters) - Asian stocks rose to near decade highs on Thursday, continuing to ride on a global equities rally, while the dollar resumed its rise on the back of a spike in U.S. yields.
There was little market reaction to China data showing its economic growth cooled slightly to 6.8 percent in the third quarter year-on-year from the second quarter's 6.9 percent, which had been widely predicted.
A modest loss of momentum had been expected as the government reins in the heated property market and cracks down on riskier lending.
Other data showed China's industrial output rise a stronger-than-expected 6.6 percent in September, while retail sales also outperformed, though investment growth eased more than expected and property sales fell for the first time in over two years.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent, nearing a 10-year peak scaled on Tuesday.
Japan's Nikkei advanced 0.6 percent to a fresh 21-year high, while South Korea's KOSPI, on a record breaking tear for the past week, crept up to an historical high while Australian stocks added 0.2 percent.
Shanghai bucked the trend and slipped 0.3 percent.
The Dow closed above 23,000 for the first time on Wednesday, driven by a jump in IBM after it hinted at a return to revenue growth.
Elsewhere, Germany's DAX had risen to another record high overnight thanks to a soggy euro.
"The surrounding environment continues to favour the broader risk asset markets, with global economies recovering gradually and inflation staying low," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
"Potential factors that could impact the markets in the short term are changes to the Federal Reserve's leadership and China's Communist Party conference."
Current Fed Chair Janet Yellen's term expires in February and investors are keen to see who U.S. President Donald Trump will pick as her replacement. The White House said Trump will announce his decision in the "coming days."
China's twice-a-decade congress kicked off on Wednesday. The focus is on how much power President Xi Jinping can cement, and whether he will use the extra clout to push through with more extensive but potentially risky economic and financial market reforms.
The dollar index against a basket of six major currencies was a shade higher at 93.393.
The index has snapped a four-session winning run overnight on lacklustre U.S. data but resumed its climb after the 10-year Treasury yield spiked 4 basis points with safe-haven bond prices falling on better investor risk appetite.
The dollar rose 0.05 percent to 113.000 yen after climbing 0.6 percent overnight. The euro nudged up 0.1 percent to $1.1800.
In commodities, Brent crude oil futures dipped 0.1 percent to $58.11 a barrel.
Brent had risen to a three-week high of $58.54 a barrel on Wednesday on worries about tensions in Iraq and Iran but lost steam after a surprising drop in U.S. refining rates and an unexpected build in fuel stocks signalled slower demand in the world's top oil consumer. (Editing by Kim Coghill)