* Nikkei ekes out slim gains, Japan data upbeat
* Yen hits five-year lows on dollar and euro
* U.S. 10-year yields touch 3 pct amid rush to risk
By Wayne Cole
SYDNEY, Dec 27 (Reuters) - Most Asian share markets notched up gains on Friday after another powerful performance by Wall Street, while Japanese economic data impressed and the dollar briefly broke the 105 yen barrier for the first time in five years.
Shanghai made the running with a rise of 1.7 percent as money rates eased and China set its yuan at an historic high. MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.8 percent.
Supporting sentiment was another record close for the Dow , while the S&P 500 brought its gains for the year so far to 29 percent.
European shares were expected to extend the cheer, with Britain's FTSE 100, Germany's DAX and France's CAC 40 seen up as much as 0.9 percent, according to financial bookmaker IG.
Tokyo's Nikkei eked out a slim gain, logging a six-year closing high. The index remains 55.6 percent higher for the year, its best annual performance since 1972, driven by Japan's aggressive fiscal and monetary stimulus.
The effort seems to be working with figures out Friday showing Japanese manufacturing activity expanding at the fastest clip in more than seven years while firms added workers at the quickest pace in over six years.
Other data showed Japan's core consumer price inflation in November running at a five-year high, marking steady progress towards ending a decade-and-a-half of grinding deflation.
"Japanese households have a lot of cash in their assets and as inflation will speed up next year, we will see a shift from their assets in cash deposit into riskier assets. Next year we will see more active trading by individual investors," said Jun Yunoki, an equity analyst at Nomura Securities.
All the money printing by the Bank of Japan has lifted the dollar 21 percent against the yen so far this year in the largest annual rise since 1979.
The greenback was up at 104.80 yen on Friday having been as far as 105.05. Option-related offers are crowded around the 105 level making it tough resistance.
The euro also hit a five-year high of 144.10 yen, and was last at 143.95. The single currency was firmer on the dollar at $1.3737, though still off last week's high of $1.3811.
While the euro zone's recovery is seen as sluggish, the currency has been underpinned by European banks' repatriation as well as buying by euro zone exporters as the region's current account surplus has increased sharply.
Supporting the dollar has been a rise in U.S. Treasury yields, with the 10-year note touching 3 percent again.
When yields got to these heights back in September it spooked the equity markets, in part because of fears rising mortgage rates would hurt the recovery in housing.
This time a run of upbeat data has reassured investors that the economy can withstand higher borrowing costs.
Figures out on Thursday underlined the improving outlook for jobs as filings for unemployment benefits took a surprisingly sharp drop to 338,000.
MasterCard Advisors SpendingPulse reported sales between Nov. 1 and Dec. 24 rose 2.3 percent, offsetting concerns that the holiday season might be weak.
In commodity markets, the long rally in equities and a lack of inflation have taken the shine off gold which looks set to suffer its biggest annual loss in three decades. On Friday, the metal was trading at $1,210.34 having failed to sustain a bounce to $1,215.70.
In contrast, copper futures jumped to its highest in four months on Friday as signs of economic revival in Asia and the United States burnished the demand outlook for metals.
Crude oil futures pared just a little of their recent gains. Brent crude eased 27 cents to $111.71 a barrel, though U.S. crude added 2 cents to $99.57.