TOKYO (Reuters) - Most Asian shares turned around a four-day losing streak and rose on Wednesday as investors took comfort from U.S. data underscoring an American recovery and assurances from China's central bank that it will offer funds to banks if needed.

But fears of a credit crunch and slower loan growth continued to fuel selling of Chinese banking shares in Shanghai. Although China's short-term borrowing rates eased for a fourth day, they remained at elevated levels.

Global equity markets rose on Tuesday after U.S. economic reports ranging from manufacturing and housing to consumer confidence buoyed optimism - after days of nerve-wracking uncertainty over the intentions of the world's biggest central banks.

The improving U.S. data pushed up the dollar, hitting precious metals hardest among the generally bearish dollar-based commodities.

"Ongoing positive data out of U.S. .... comes at a time when the market is very oversold," said Martin Lakos, division director at Macquarie Private Wealth in Sydney.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.4 percent after plumbing an 11-month low on Tuesday, with Australia, Hong Kong and Southeast Asian bourses all higher.

Still, the gauge's relative strength index (RSI) was a weak 25.6, showing investor confidence in pan-Asian bourses remains badly shaken after a month-long emerging market slide.

But the Nikkei stock average gave up early gains to fall nearly 1 percent by the midday break, as Shanghai shares once again turned lower and extended losses to more than 1 percent

At one point on Tuesday, Shanghai benchmarks tumbled nearly 7 percent to the lowest since January 2009.

The People's Bank of China (PBOC) said late on Tuesday it had provided cash to some institutions facing temporary shortages and would continue to do so if needed, seeking to tame investor jitters amid spiking money market rates that raised fears of a banking crisis and sent shares plummeting.

China's short-term cash rates soared to record peaks last week after the PBOC allowed money market funding to tighten to curb credit for the lightly regulated and speculative "shadow banking" sector, stoking worries of a cash squeeze which could derail economic growth.

"It is clear that the PBOC has fine-tuned its tone to ease the liquidity tightness," economists at ANZ said in a research note.

"We view this as a positive move by the central bank to communicate to the market. As the PBOC clearly states that it has already provided, and will continue to provide liquidity support to some banks, this will greatly improve the market's confidence."

DOLLAR FIRMS

Tuesday's data showed strong gains in U.S. business spending plans last month, the largest annual rise in house prices in seven years in April, and consumer confidence at its highest level in more than five years this month. The housing sector was also firming, with new single-family home sales near a five-year high in May.

"Overall these data align with the Federal Reserve's assessment that the U.S. economy is improving modestly, and specifically over the past two weeks, U.S. economic data has by and large beaten consensus forecasts," said Christopher Vecchio, analyst at DailyFX.

The Fed ignited a global market sell-off last week by announcing a plan to end stimulus, starting with a toning down of its monthly bond-buying later this year if the economy continued to improve as forecast.

The dollar pared early gains to hold steady against the yen around 97.79, and was also steady against a basket of major currencies , crawling back towards a three-week high of 82.841 seen on Monday.

U.S. crude futures were down 0.3 percent at $95.08 a barrel and Brent inched down 0.1 percent to $101.17.

"A drop in emerging currencies has made dollar-based commodities prices more expensive and spurred outflows from commodities markets which have been suffering from fund outflows for some time now," said Tetsu Emori, a commodity fund manager with Astmax Investments in Tokyo.

Spot gold dropped 2.3 percent to a near three-year low of $1,247.24 an ounce, dragging spot silver down more than 4 percent to $18.77, its lowest since August 2010.

(Additional reporting by Ian Chua and Maggie Lu Yueyang in Sydney; Editing by Eric Meijer)

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