* Asian stock markets: https://tmsnrt.rs/2zpUAr4

* Fall in U.S. jobless rate pushes stocks higher

* Unrest in Hong Kong could weigh on market sentiment

* Investors are nervous before U.S.-China trade talks

By Stanley White

TOKYO, Oct 7 (Reuters) - Asian shares edged higher on Monday after data showed the U.S. unemployment rate dropped to the lowest in almost 50 years, easing concerns of a slowdown in the world's largest economy.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.25%. Japan's Nikkei stock index rose 0.29%, while Australian shares were up 0.48%

U.S. Treasury yields inched higher as Friday's data on the U.S. jobs market suggests the Federal Reserve may not need to cut interest rates further.

Sentiment toward the U.S. economy deteriorated sharply last week after disappointing data on manufacturing and services suggested the trade war was taking a toll, and more rate cuts would be needed to avert a potential recession in the world's biggest economy.

The modest increase in U.S. jobs has eased some of these concerns, but traders warn that downside risks loom large on the horizon. The U.S. unemployment rate fell to 3.5% in September to reach the lowest since December 1969. Non-farm payrolls also grew in September, but slightly less than expected.

The focus will shift to the next round of U.S.-China trade negotiations expected in Washington on Oct. 10-11 to see if the two sides can end a bruising year-long trade war that has hurt global growth and raised the risk of recession.

"Moderate job growth and subdued inflation in the United States is a positive for stocks," said Shusuke Yamada, head of FX and Japan equity strategy at Merrill Lynch Japan Securities in Tokyo. "However, the dollar is a little soft heading into U.S.-China trade talks. I see some scope for yen gains, but it is not likely to be a big move higher."

U.S. stock futures, fell 0.35% in Asia on Monday after the S&P 500 ended 1.4% higher on Friday.

In currency markets, the yen gained slightly and the yuan slipped after Bloomberg reported that Chinese officials are signalling they are increasingly reluctant to agree to a broad trade deal pursued by U.S. President Donald Trump.

The yuan weakened about 0.20% in offshore trade to 7.1285 yuan per dollar. There is no onshore trading as Monday is the last day of China's holiday break.

The United States and China have slapped tariffs on each other's goods as part of a long-running dispute over Beijing's trading practices, which Washington says are unfair.