(Updates prices, adds Chinese shares)
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Asia shares inch higher as U.S. markets holiday
* Oil prices climb on Libyan supply concerns
* Dollar firm as U.S. economy outperforms
* Eyes on U.S. earnings, Netflix to report on Tuesday
By Wayne Cole
SYDNEY, Jan 20 (Reuters) - Asian shares held near a 20-month top on Monday even as investors took some money off the table following a strong run recently, while oil jumped to more than a one-week high after two large crude production bases in Libya began shutting down.
In early European trades, the pan-region Euro Stoxx 50 futures STXEc1 , German DAX futures FDXc1 and FTSE futures FFIc1 each added 0.1% while E-Mini futures for the S&P 500 ESc1 inched up slightly.
Turnover in Asian shares was light with U.S. stock and bond markets closed for the Martin Luther King Jr. holiday.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS gave up early gains to be flat, after earlier notching up its highest since June 2018. Japan's Nikkei .N225 added 0.2% to be near its highest in 15 months.
Chinese shares stayed strong with the blue-chip CSI300 index .CSI300 rising 0.7%.
Australia's main index .AXJO scored another all-time peak and South Korea .KS11 was near its best level since October 2018.
Eyes will be on U.S. corporate earnings with Netflix Inc NFLX.O , Intel Corp INTC.O and Texas Instruments Inc TXN.O set to report this week, while central banks in the European Union, Canada and Japan hold policy meetings.
Sentiment was supported by the relentless run of record highs on Wall Street. Only three weeks into the new year, the S&P 500 .SPX has gained just over 3% and the NASDAQ .IXIC almost 5%.
Ray Attrill, head of foreign exchange strategy at National Australia Bank, suspects the strength on Wall Street owes much to the Federal Reserve's decision in September to rein in rising repo rates by flooding markets with cash.
"The relationship between the size of the Fed's balance sheet, now some 11% bigger than where it was in late September, and the performance of U.S. risk assets is uncanny," he said, noting the balance sheet had just hit a three-month top of $4.18 trillion.
Analysts at BofA Global Research noted global stock market capitalisation had ballooned by $13 trillion since its September lows and the S&P was only 5% away from marking the biggest bull run in history.
"We stay irrationally bullish until peak positioning and peak liquidity incite a spike in bond yields and a 4-8% equity correction," they said in a note.
The Fed's buying binge on Treasury bills has kept bonds bid even as stocks surged and economic data stayed healthy. Yields on two-year notes US2YT=RR are dead in line with the overnight cash rate at 1.56%, compared to 2.62% this time last year.
The string of mostly solid U.S. data has underpinned the dollar, particularly against the safe-harbour yen. The dollar stood at 110.17 yen JPY= on Monday, having hit an eight-month peak of 110.28 last week.
The euro was stuck at $1.1097 EUR= , while sterling idled at $1.3000 GBP= after poor British economic news fanned speculation about a cut in interest rates. a basket of currencies, the dollar was flat at 97.616 .DXY , moving away from the recent trough of 96.355.
Spot gold was a tad firmer at $1,561.69 per ounce XAU= , having hit a seven-year top earlier this month of $1,610.90 at the height of Iran-U.S. tensions.
Concerns about a cut in supply sent oil prices higher as oilfields in southwest Libya began shutting down after forces loyal to Khalifa Haftar closed a pipeline. O/R
Brent crude LCOc1 futures rose 79 cents to $65.64 a barrel, while U.S. crude CLc1 jumped 61 cents to $59.15.
https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations
https://tmsnrt.rs/2Dr2BQA Pipeline closure risks taking nearly all Libya's oil offline
Pound reverses gains after bleak British retail sales
Foreign powers back Libya ceasefire as commander's forces choke oil flows