(Reuters) - The dollar dipped against the euro on Thursday after subdued U.S. inflation supported the Federal Reserve's case for quantitative easing, while Asian equities stabilized after an eight-day sell-off.
Hopes that Ireland will soon see a solution to its debt crisis supported stocks, which have been dogged by uncertainty about how Europe would tackle Ireland's debt woes and fears that China may take aggressive steps to curb inflation.Such factors had helped exacerbate a recent sell-off in risky assets and a short-covering rally in the dollar that traders say is partly due to investors trimming their bets before market liquidity dwindles toward the year-end.

The euro and Asian equities gained some respite after Ireland agreed to work with EU and IMF officials on steps to shore up its shattered banking sector.

The MSCI index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS rose 0.2 percent to 457.50.

The index had fallen for eight sessions, shedding 5.7 percent. It is still not far from its highest in more than two years hit in early November after the Federal Reserve unveiled its $600 billion bond buying scheme.

* Australian shares .AXJO edged up 0.1 percent in mixed trade, supported by gains in retailer David Jones (DJS.AX) after positive sales, and Atlas Iron (AGO.AX) after it announced rail talks with BHP Billiton (BHP.AX). .AX

Japan's Nikkei average .N225 rose 0.9 percent. Among the leading gainers were financial stocks, which have been among the worst performers this year. The banking sector sub-index rose 2.6 percent .IBNKS.T, adding to its rally over the past week.

The euro rose 0.2 percent to $1.3554, pulling away from a seven-week trough of $1.3446 hit on Tuesday on trading platform EBS.

The dollar index, which measures its value against a basket of major currencies, stood at 78.962 .DXY, having retreated from Tuesday's seven-week high of 79.461.

The dollar's retreat followed news that the U.S. core consumer prices rose just 0.6 percent in October from a year earlier, the smallest rise in records kept since 1957.

By Masayuki Kitano