* China benchmark money rate shoots up
* China's manufacturing expands at best pace in 7 mths - survey
* Swiss franc holds near 2-yr high vs dollar
By Dominic Lau
TOKYO, Oct 24 (Reuters) - Chinese shares slipped in volatile trade on Thursday as a further spike in China's money-market rates tempered the effect of a survey showing a pick-up in manufacturing.
China's benchmark seven-day repo rates opened up nearly a full percentage point at 5 percent after the central bank let cash drain from the money market for a second week.
The Chinese central bank declined to inject cash for a third day as regulators showed signs of concern that loose liquidity might again be fuelling risky credit growth.
Australian shares advanced 0.3 percent and the Australian dollar rose 0.3 percent to $0.9650 on the day. China is Australia's biggest export market.
China's CSI300 index dipped 0.2 percent in choppy trade after sliding 2.1 percent in the previous two sessions, and Hong Kong's Hang Seng Index dropped 0.7 percent.
Japan's Nikkei share average eased 0.4 percent in relatively light trade, also hurt by a firmer yen against the dollar.
But MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.1 percent, having fallen 0.9 percent on Wednesday to end a four-day winning streak.
Financial bookmakers expected major European indexes to open up as much as 0.5 percent, rebounding from Thursday's decline.
"I wouldn't add on any new positions from here," said Hong Hao, chief strategist at Bank of Communications International Securities.
"Cash demand is going to be high in October because people have to pay taxes and banks have to park reserves with the central bank, but I think people ought to see that the People's Bank of China has already tightened because they have not sold any yuan, allowing the yuan to spike," he added.
"Now with the property restrictions starting to appear, that usually doesn't bode well for the stock market."
Strong new orders drove the fastest expansion in China's manufacturing sector in seven months in October, according to the Markit/HSBC Purchasing Managers' Index, more evidence that the world's second-largest economy is stabilising although a strong rebound remains elusive.
Before the concerns over China checked the market bullishness, global equity markets had been rallying after the resolution of the U.S. budget impasse and on expectations the Federal Reserve would extend its cheap money stimulus into 2014.
After a run of record highs, the U.S. Standard & Poor's 500 index fell 0.5 percent on Wednesday as shares of heavy-equipment maker Caterpillar and semiconductor companies tumbled after they reported earnings.
According to Thomson Reuters I/B/E/S, the one-month earning momentum for S&P 500 companies deteriorated to minus 3.6 percent from minus 1.5 percent last month.
U.S. S&P E-mini futures added 0.3 percent in Asian trade on Thursday.
The dollar was at 0.8916 Swiss franc, just above a two-year low of 0.8908 hit on Wednesday. It was holding at 97.375 yen, near a two-week low touched in the previous session.
Against a basket of major currencies, the dollar was down 0.1 percent at 79.211, within striking distance from an eight-month low of 79.137 touched on Wednesday.
U.S. Treasury yields fell to three-months lows on growing bets that the Fed will maintain its stimulus into next year.
U.S. crude prices climbed 0.6 percent to about $97.44 a barrel after falling to a 3-1/2 month low of $96.16 on Wednesday.
Gold gained 0.3 percent to around $1,336 an ounce, recouping some of Wednesday's lost ground.