(Reuters) - Asian shares inched higher and the euro stayed above a 17-month trough Tuesday as investors focused on economic data from China to gauge the impact of the eurozone debt crisis on global growth.

MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.3 percent, after hitting its lowest in about a week on Monday, while Japan's Nikkei average <.N225> opened up 0.5 percent, off a four-week low hit the day before.

European shares and the euro recovered on Monday, shrugging off the latest move by Standard & Poor's to cut a top-notch credit rating on the eurozone's bailout fund, following mass downgrades late last week which stripped France and Austria of their prime AAA ratings. U.S. markets were closed for a holiday on Monday.

The euro stood at $1.2663, hovering above a low of $1.2624 hit on Friday, its lowest since late August 2010, according to trading platform EBS. It also held steady against the yen at 97.29 yen, having hit an 11-year low near 97 yen on Monday.

Sentiment was subdued in Asian credit markets early Tuesday, keeping spreads barely changed on the iTraxx Asia ex-Japan investment grade index.

For now, investors were turning to economic data, although sentiment remained pressured by persistent concerns about Europe's ability to resolve its two-year-old debt crisis, with Greece struggling to break a deadlock on its debt-swap talks, keeping intact fears of a default.

As EUR/USD tumbles toward a key long-term support level, it is interesting to note that the positive correlation between EUR/USD and equities is starting to erode, RBC Capital Markets said in a report, referring to a recovery in S&P 500 index futures from mid-December as the euro eased against the dollar.

The key take-away here is that the 'risk on/risk off' dynamic may be starting to have less of an influence on markets, with pure 'fundamentals' becoming more relevant as the Eurozone crisis is now infecting core markets, it said.

CHINESE GDP DATA DUE

The main focus on Tuesday is Chinese GDP data, forecast for a fourth successive quarterly slowdown in growth to around 8.7 percent from 9.1 percent previously.

December industrial production and retail sales are also due. Chinese data will provide clues to policy options including monetary easing to support growth in the world's second-largest economy, which could help underpin sentiment.

For Europe, market attention will likely switch to the latest ZEW survey due later on Tuesday on the health of the giant German economy.

In the first test of investor appetite for French debt since the S&P rating downgrade, yields on French treasury bills eased marginally on Monday.

Euro zone faces further tests later in the week when France and Spain offer longer-dated debts.

Reflecting the fragility in investor confidence, the European Central Bank more than tripled its bond purchases in the week to January 13 to calm market fears, while commercial banks parked a record amount of overnight deposits at the ECB, defying the central bank's aim to spur lending via its massive cash injection into the system.

The cost of insuring Italian, Spanish and other euro zone government debt against default rose on the S&P ratings cuts, while a flight to safety pushed shorter-dated UK government bond yields down on Monday.

Retail sales China Retail Gdp