* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Pound posts best 1-day percentage gain since April 2017
* Rejection of no-deal Brexit sparks rally in pound
* Asian shares tread water, investors await China data
By Swati Pandey
SYDNEY, March 14 (Reuters) - Asian shares paused on Thursday as investors awaited data from China for clues about the health of the world's second largest economy while the pound shot up to near nine-month highs as the risk of a no-deal Brexit receded following a late-night vote.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was barely changed at 522.38 points. Japan's Nikkei .N225 jumped 0.6 percent while Australian and New Zealand shares .AXJO .NZ50 each added 0.2 percent.
Asian markets have seen an impressive rally this year with the MSCI index climbing about 10 percent largely after the U.S. Federal Reserve all but abandoned its rate hike plans.
Wall Street was buoyant overnight after U.S. data showed producer prices barely edged higher in February, the latest sign inflation remains tame and affirming expectations the Federal Reserve would maintain a "patient" approach to future tightening. however, remain sceptical about how much further a share rally would run as signs of slowing global growth, weak corporate earnings and trade tensions between the United States and China hang heavy on risk assets.
"Before we conclude that this market still has decent legs, we'd like to see equity prices supported by stronger macro data, lifted by better earnings trends, and confirmed by stable-to-rising yields," David Lafferty, chief market strategist at Natixis, said in a note titled 'Rally vs Reality'.
All eyes were on China, which is due to release figures on retail sales and industrial production later in the day.
Most of the action overnight was in Sterling after the British parliament rejected leaving the European Union without a deal, paving the way for a vote that could delay Brexit until at least the end of June. rejection of a no-deal Brexit sent the cable rallying to $1.3380, the highest since June 2018. It jumped 2.1 percent for its best one-day percentage gain since April 2017 and was last at $1.3315.
The real test for Sterling is yet to come, said Ray Attrill, head of forex strategy at National Australia Bank, as lawmakers still need to agree a way forward before an extension from the European Union could be obtained.
"Sterling is set to stay stuck in the washing machine for a while longer," Attrill said.
"Indeed, it is still not possible to rule out the risk that we end up with a snap general election, an event risk which, were it to transpire, has the potential to hurt Sterling by even more than the prospect of an imminent UK exit from the EU without any transition arrangement."
The euro extended gains for a fifth day in a row to the highest since March 5. It was last at $1.1306. EUR=
Wednesday's vote boosted investor optimism in equities market too, with the pan-European STOXX 600 index .STOXX climbing 0.6 percent while London's FTSE 100 .FTSE added 0.1 percent as sterling extended gains.
The dollar eased on the inflation data with its index against a basket of major currencies .DXY slipping for a fourth straight day to a 1-1/2 week trough. Against the Japanese yen, the dollar was last at 111.15.
Oil prices extended overnight gains with U.S. crude CLc1 up 9 cents per barrel at $58.35 and Brent LCOc1 adding 7 cents to $67.62.
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