(Updates levels throughout)
* Asian stocks ease from multi-week peaks, valuations heady
* U.S. dollar slide continues
* Euro maintains strength
* U.S. unemployment report in view
By Swati Pandey
SYDNEY, June 5 (Reuters) - Asian stocks erased early losses on Friday and were poised for their biggest weekly rise since 2011 while the euro hovered near a 1-1/2 month high as Europe's central bank surprised with more stimulus, fuelling hopes for a global rebound.
The market was a bit choppy as some investors chose to take profits ahead of Friday's nonfarm payrolls data, which is expected to show further deterioration in the U.S. jobs market.
MSCI's broadest index of Asia-Pacific shares outside of Japan rose 0.1%, reversing early losses to stay near a 12-week top.
The index is up about 6.5% this week, on track for its best weekly showing since December 2011.
South Korea's KOSPI was among the best performers on Friday, up 0.7% while Australia's benchmark index and Japan's Nikkei each added 0.1%.
Chinese shares were still in red with the blue-chip index off 0.3%.
Emerging market equities, which have boasted solid gains this week, were in a profit taking mode.
"This market has gone up so far, so fast there's a lot of people saying, 'I'm going to take a little profit,'" said Jim Paulson, chief investment strategist at The Leuthold Group in Minneapolis.
E-mini futures for the S&P 500 rose 0.3%.
Overnight, the S&P 500 eased 0.34% and the Nasdaq Composite lost 0.69%. The Dow bucked the trend and ended a shade higher.
Investors were a tad cautious at these heady levels with valuations at their highest since the dot.com boom in 2000, according to Matthew Sherwood, investment strategist for Perpetual.
Technical chart indicators suggest the market is at "over-bought" levels, Sherwood added, a signal that a correction is due.
World equity markets were thrashed in March when they hit "bear territory" on fears the COVID-19 driven lockdowns would push the global economy into a long and deep recession.
Market sentiment has since been bolstered by powerful central bank stimulus.
"Central banks have rightly stepped in to cushion the economic blow of COVID-19 and unquestionably succeeded in steadying the ship," said Bob Michele, chief investment officer and head of the global fixed income, currency & commodities group at J.P.Morgan Asset Management.
However, Michele warned the massive scale of quantitative easing would distort pricing and mute traditional signals from bond markets on growth and inflation, advocating "co-investing" alongside central banks.
Investor attention is now focused on Friday's U.S. employment report, which is expected to show nonfarm payrolls fell in May by 8 million jobs after a record 20.54 million plunge in April.
The U.S. unemployment rate is forecast to rocket to 19.8%, a post-World War Two record, from 14.7% in April.
Currency markets show continued confidence in the expected revival of the global economy.
The euro was last at $1.1337 after hitting a 12-week high of $1.1361 on Thursday led by the European Central Bank's (ECB) plan to boost its emergency bond purchases.
The common currency is up 2% this week, on track for its third consecutive weekly gain.
All eyes will next be on the U.S. Federal Reserve, which holds its regular two-day policy meeting next week.
The U.S. dollar was a tad higher against the Japanese yen at 109.19, having risen 1.2% so far this week.
The dollar index, which measures the greenback against a basket of major currencies, is poised for its third straight weekly loss.
The risk sensitive Australian dollar held near a five-month peak at $0.6947, on track for its third straight weekly rise.
In commodities, U.S. crude eased 4 cents to $37.37 per barrel and Brent added 8 cents to $40.07.
Spot gold inched down to $1,709 an ounce.
Reporting by Swati Pandey in Sydney and David Henry in New York; Editing by Sam Holmes & Simon Cameron-Moore