* Asian stock markets: https://tmsnrt.rs/2zpUAr4Long-battered Australian financial shares jump
* Many Asian markets closed for Lunar New Year holiday
* Trump's State of the Union address due later in the day
By Hideyuki Sano and Tomo Uetake
TOKYO, Feb 5 (Reuters) - Asian stocks extended their gains on Tuesday as overnight strength on Wall Street and the Federal Reserve's dovish turn underpinned risk appetite, while the dollar held firm on last week's upbeat U.S. data.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.4 percent and hovered near its four-month high marked on Friday. Japan's Nikkei average .N225 was flat on the day but at its highest level in seven weeks.
Australian shares .AXJO jumped 2.5 percent, with long-battered financials .AXFJ surging on short-covering after a special government-appointed inquiry excoriated Australia's financial sector for misconduct but left the structure of the country's powerful banks in place. in Asia, trade was light, with markets in greater China, Taiwan, South Korea, Singapore and Indonesia all closed for the Lunar New Year.
On Wall Street, the S&P 500 .SPX gained, with technology .SPLRCT and industrials .SPLRCI the biggest winners as investors braced for another big week of fourth-quarter corporate earnings reports.
After the bell, Google operator Alphabet GOOGL.O fell about 3 percent as its higher spending in the fourth-quarter worried investors even as its revenue and profits beat the Street's expectations. gauge of stocks across the globe .MIWD00000PUS reached a two-month high, having risen more than 13 percent from its near two-year low late in December, helped by the Fed's change of tack.
Fed Chairman Jerome Powell has signalled its three-year tightening drive may be coming to an end amid a suddenly cloudy outlook for the U.S. economy due to global growth concerns and the U.S.-China trade dispute.
The Fed said in a statement that Powell had told President Donald Trump and Treasury Secretary Steven Mnuchin late on Monday that policy will "depend entirely" on incoming economic information. announced on Friday showed U.S. job growth surged in January while a key gauge of U.S. manufacturing sector showed surprising resilience after December's shocking fall, allaying fears the U.S. economy might be losing momentum quickly.
Hiroshi Nakamura, senior manager of investment planning at Mitsui Life Insurance, said financial markets' positive reaction to the U.S. data is diminishing with time, but hopes for a U.S.-China trade deal "will continue to support markets until the two sides come to formal decisions".
The dollar was on a firm footing as investors continued to lap-up Friday's strong payrolls number and a manufacturing survey.
The dollar's index against six major currencies .DXY was little changed at 95.823, having gained 0.27 percent on Monday.
The euro was also steady at $1.1439 EUR= , off three-week high of $1.15405 set on Thursday.
The greenback firmed to 109.99 yen JPY= , having risen to 110.165 the previous day, its highest level in five weeks.
The British pound GBP=D3 barely moved and was at $1.3041. On Monday, sterling quickly erased brief gains following a newspaper report that goods shipped to Britain from the European Union could be waved through without checks in the event of a "no-deal" Brexit. Australian dollar fell 0.3 percent to $0.7207 AUD=D3 after local retail sales reinforced concerns about slowing growth in Australia. Reserve Bank of Australia is all but certain to leave policy unchanged at its first meeting of 2019 later on Tuesday after sitting on the fence since August 2016. commodity markets, oil prices inched up on Tuesday, buoyed by expectations of tightening global supply amid U.S. sanctions on Venezuela and production cuts led by OPEC. O/R
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 0.4 to $54.79 a barrel, after hitting a 2-1/2-month high of $55.75 in the previous session, while Brent crude futures LCOc1 were last up 0.4 percent at $62.77.
Gold prices held near one-week lows hit in the previous session, pressured by a firmer dollar and as investor appetite for riskier assets picked up. GOL