By Gregor Stuart Hunter

SINGAPORE, July 3 (Reuters) - Stocks made a mixed start to the Asian trading session on Friday after a lukewarm U.S. jobs report poured cold water on the prospect of an imminent rate hike from the Federal Reserve.

MSCI's broadest index of Asia-Pacific shares outside Japan .MISX00000PUS fluctuated between gains and losses, edging up 0.1% after two consecutive days of declines.

South Korea's Kospi .KS11 weighed on the regional benchmark in sympathy with sharp falls in chipmakers in U.S. trading. S&P 500 e-mini futures EScv1 and Nasdaq e-mini futures NQcv1 were both up 0.1%, while Japan's Nikkei 225 .N225 was down 1%.

U.S. job growth slowed sharply in June and payroll gains for the prior two months were revised lower, according to data released on Thursday, pointing to a cooling labour market. The unemployment rate dropped to 4.2% last month from 4.3% in May as workers left the labour force, pushing the participation rate to the lowest level in more than five years.

"The figures challenged the narrative that the Fed remains on track to hike in the second half of this year," Westpac analysts wrote in a research report.

The tepid jobs data doused traders' expectations of an imminent rate hike and raised the odds that the Fed will keep rates on hold until October.

Fed funds futures are pricing an implied 46.8% probability that the U.S. central bank will keep rates steady at its meeting on September 15 to 16, compared to a 35.8% chance a day earlier, according to the CME Group's FedWatch tool.

Overnight, stocks on Wall Street were a mixed bag as the S&P 500 .SPX was flat and the Nasdaq Composite .IXIC slipped 0.8%, while the Dow Jones Industrial Average .DJI rose to a record close.

The U.S. market will be closed on Friday in observance of the Independence Day holiday.

Against the yen JPY=, the U.S. dollar was up 0.2% at 161.435 yen at the start of Asian trading, with market liquidity thinned by the holiday.

The greenback clawed back some strength after a twitchy session on Thursday, with a sudden bout of strength in the Japanese currency after Reuters reported authorities have adopted a new approach to their forays into the market. It was not immediately clear what drove the rally.

The U.S. dollar index =USD, which measures the greenback's strength against a basket of six currencies, was steady at 100.98 after sliding 0.5% on Thursday.

In commodities, Brent crude futures LCOc1 slipped 0.4% to $71.49 as trading resumed in Asia. Gold XAU= was up 0.1% at $4,125.49.

In cryptocurrencies, bitcoin BTC= was down 0.4% at $61,306.45, while ether ETH= was down 0.7% at $1,692.16.