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SINGAPORE (Reuters) � Asian stocks rose on Friday as stronger-than expected economic data from China and the United States boosted confidence in the global economic recovery.

U.S. Treasury prices slipped as investors turned to stocks and the dollar held steady after dropping to an eight-month low against a basket of currencies the previous day.

Chinese manufacturing gathered momentum last month, handily beating market forecasts and providing further evidence that the economy is pulling smoothly out of a second-quarter slowdown.

The MSCI index of Asia Pacific stocks outside Japan (.MIAPJ0000PUS) was up 0.36 percent compared with a rise of 0.24 before the release of China's Purchasing Managers Index. The index gained more than 17 percent in the last quarter.

"This looks like the real deal. It's not just inventory correction. We think that end demand is picking up in China and the economy has stabilized after the summer lull," said Frederick Neuman, co-head Asian economics, HSBC in Hong Kong.

Japan's Nikkei average rose 0.5 percent on Friday, helped by short-covering after sharp falls the previous day and after U.S. economic data provided a degree of optimism.

New U.S. claims for jobless benefits fell last week, a sign of an improving labor market, while Midwest business activity grew more than expected in September. Also, U.S. second-quarter growth was revised a touch higher on firmer consumer spending.

"Japanese stocks are recouping some ground as investors appear to be correcting extreme pessimism triggered yesterday by the yen's advance and worries about European finance problems," said Koichi Nosaka, a market analyst at Securities Japan, Inc.

India is scheduled to release its manufacturing survey data later on Friday.

The dollar held steady at 83.55 yen, backing away from the previous day's low at 83.16 yen and moving further off last month's 15-year low below 83 which had prompted Japanese authorities to intervene for the first time in six years.

The euro paused below a five-month high on the dollar on Friday while the Australian dollar jumped on optimism that the strong data from China augured well for the country's resource exports.

(Additional reporting by Charlotte Cooper and Aiko Hayashi in TOKYO)

(Editing by Tomasz Janowski)

NEW YORK (Reuters) � The economic recovery remains disappointingly slow with unemployment too high, two top Federal Reserve officials said on Thursday, as they discussed the role of the U.S. central bank in spurring a stronger economy.

Federal Reserve Chairman Ben Bernanke, in remarks at a town hall event held by the Fed, commented on the pain still felt by many Americans, but spoke only in generalities about the Fed's commitment to stimulate growth.

The president of the Cleveland Fed, Sandra Pianalto, said growth is currently too slow to significantly reduce the "stubbornly high" unemployment rate. She said she is currently assessing the effectiveness of the tools that the central bank could employ if the Fed were to decide the economic recovery needs an extra boost.

"Even though our economy is stabilized and growing, clearly it is still a very difficult time for many Americans," Bernanke said.

"The unemployment rate is still almost 10 percent, inflation is quite low, and the Federal Reserve has the responsibility ... to do our part to help the economy recover and make sure that jobs come back to the United States," he said.

Pianalto, who addressed an event in New York, in addition to highlighting the high unemployment rate, said inflation was "too low."

She said inflation is below the 2 percent level that she sees as consistent with the Fed's longer-term objective of price stability, and said it is likely to stay low through 2011.

Low inflation is considered a concern, because it could run the risk of tipping into deflation, a vicious cycle of downward prices and slowing economic activity.

Pianalto said the Fed has options if it decides a further boost to the economy is needed.

Pianalto, who is a voter on the Fed's policy-setting panel this year, said that because a stronger economy is a solution to the unemployment problem, policies should aim to support growth. But growth is currently too slow to make much progress in reducing the jobless rate, she said.

The Fed, which has kept interest rates near zero percent since December 2008. recently said it stands ready to help the recovery if necessary. It has promised to keep interest rates exceptionally low for an extended period and has pumped $1.7 trillion into the financial system through purchases of longer-term Treasury securities and mortgage-related debt.

With economic growth expected to be weak in the second half of 2010 and unemployment high, most analysts expect the Fed to start a new round of bond purchases, or quantitative easing, when it meets in early November.

Fed officials in recent days, however, have offered divided views over what should be the catalyst for the U.S. central bank to provide more support to the economy and over the likely impact more asset purchases could have.

Pianalto said she was currently assessing the effectiveness of the tools available to the Fed, which apart from buying more longer-term bonds include strengthening its commitment to easy policy in its policy statement and lowering the interest it pays on excess reserves.

"Because we have less experience in using these unconventional tools, we have to look at the cost and benefits ... at the effectiveness," she told the Women's Economic Round Table.

"That's what I am in the process of doing with my staff. We are trying to get more information on the effectiveness of these tools."

Bernanke fielded questions by video from teachers in each of the Fed's 12 districts. While he did not go into detail about the outlook for the economy or Fed policy, his remarks conveyed concern for the sluggish pace of recovery and a sense the Fed should be active.

Bernanke said it was not uncommon for a recovery following a financial crisis to be slow. Consumers may pull back from spending as they cope with lost wealth or to reduce debt, but growth may come from business investments and exports, he said.

"The economy is moving, perhaps not as quickly as we would like, and we want to make sure that progress continues," he said.

(Additional reporting by Mark Felsenthal in Washington; Editing by Leslie Adler)