(Reuters) - Stock markets in China and Japan rose on Monday after Beijing's latest stimulus to shore up the world's second-largest economy underpinned sentiment and helped limit losses across the rest of Asia.

China's central bank on Sunday cut the amount of cash that banks must hold as reserves, the second industry-wide cut in two months, adding more liquidity to bolster slowing growth.

MSCI's broadest index of Asia-Pacific shares outside Japan was down about 0.1 percent, after ascending to a fresh seven-year peak in the previous session. Japan's Nikkei stock index was up 0.3 percent, after shedding 1.3 percent last week.

"There's no need for markets to worry too much because of the weakness in global stocks on Friday," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, who said China's latest step to shore up its economy helped support Japanese stocks.

Chinese shares rose after the stimulus injection, with the CSI300 index adding 1.2 percent after dipping into the red at one point, while the Shanghai Composite Index was up 1.1 percent at 4,313.06 points. But Hong Kong's Hang Seng was down 0.3 percent.

Many investors had been braced for a selloff on Monday prior to the PBOC's move after China's security regulator warned investors to be cautious. Chinese regulators said on Friday, after mainland markets had closed, they would allow fund managers to lend shares for short-selling, and would also expand the number of stocks investors can short sell, in a bid to raise the supply of securities in the market.

"Over the weekend, regulators gave the market both sticks and carrots, emboldening both bulls and bears," Qilu Securities wrote in a note to clients.

On Friday, major U.S. stock indexes ended with daily and weekly losses over 1 percent, dragged down by the trading regulations changes in China, renewed worries about Greece, and tepid U.S. corporate earnings.

France's central bank chief said Greek banks may soon run out of collateral to access European Central Bank refinancing unless Athens reaches an agreement with the European Union and International Monetary Fund on economic reforms.

The euro was flat on the day $1.0799, off Friday's high of $1.0849.

The dollar inched down about 0.1 percent against its Japanese counterpart to 118.84.

The dollar index, which tracks the greenback against a basket of rivals, was down about 0.1 percent at 97.433. The index suffered a 1.8 percent drop last week as disappointing U.S. economic data prompted the market to trim dollar-long positions on fading expectations that the U.S. Federal Reserve would raise interest rates as early as June instead of holding off.

Crude oil was higher as Middle East turmoil and signs of lower U.S. production lifted prices. The leader of Yemen's Iranian-allied Houthi militia accused Saudi Arabia on Sunday of plotting to seize the country.

Brent added 1.2 percent to $64.18 a barrel, while U.S. crude rose 1.4 percent to $56.49.