* Fed widely expected to hike interest rates
* Democrat beats Trump-backed candidate in Alabama
* Crude futures take back some ground after tumble
By Lisa Twaronite
TOKYO, Dec 13 (Reuters) - U.S. stock futures, Treasury yields and the dollar dipped on Wednesday as Democrat Doug Jones beat Republican Roy Moore in a bitter U.S. Senate race in Alabama, while Asian shares gained as crude oil futures took back some lost ground.
European stock futures suggested a subdued opening for the region, FTSE futures nearly flat and CAC futures 0.1 percent lower.
Jones’ victory could mean trouble for President Donald Trump and his populist political base. It narrows the Republicans’ already slim majority in the U.S. Senate, possibly making it harder for Trump to advance his policy agenda.
“The U.S. dollar is on the backfoot after Jones has scored an upset victory over Moore in the Republican stronghold of Alabama, and the implications are that it shrinks the Republican’s Senate majority from 51 to 49,” said Sue Trinh, head of Asia foreign-exchange strategy at RBC Capital Markets in Hong Kong.
“The big issue now is, whether Republicans will push through their tax bill before Christmas,” she said. “And more broadly, U.S. dollar bulls will be more worried that this marks a Democratic revival into 2018 mid-term Congressional elections.”
The election temporarily seized the spotlight away from the Federal Reserve, which is widely expected to raise interest rates later on Wednesday and could provide clues about the timing of future U.S. policy moves.
S&P e-mini futures were down as much as 0.3 percent after the election outcome. They were last down 0.1 percent.
The dollar index, which tracks the greenback against a basket of six major rival currencies, was down 0.2 percent at 93.959 pulling away a high of 94.219 touched on Tuesday, which was its highest since Nov. 14.
The dollar slumped 0.2 percent to 113.38 yen, while the euro rose 0.1 percent to $1.1755.
“Heading into tonight, this reaction could be an opportunity for people to pick up some dollars ahead of the Fed meeting,” said Bart Wakabayashi, branch manager for State Street Bank in Tokyo.
The 10-year Treasury yield stood at 2.401 percent after falling to a session low of 2.389 percent, compared to its U.S. close on Tuesday of 2.403 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.5 percent, while South Korean shares gained 0.8 percent.
Japan’s Nikkei stock index finished 0.5 percent lower, pressured by the stronger yen and shrugging off upbeat economic data that showed Japanese core machinery orders rose a more-than-expected 5 percent in October.
On Wall Street on Tuesday, the Dow Jones Industrial Average and the S&P 500 both notched record closing highs, though the Nasdaq Composite shed 0.19 percent.
Bitcoin was down 0.9 percent on the Bitstamp exchange at $16,510.34.
The Fed will conclude its two-day policy meeting and is seen raising its benchmark rate to between 1.25 and 1.50 percent, with investors also focusing on clues to the pace of tightening next year.
Concerns that the central bank would take a slower pace of tightening due to cool inflation were partly alleviated by data on Tuesday that showed U.S. wholesale inflation rose last month. Consumer price index (CPI) data will be released later in the global session on Wednesday.
The Bank of England and the European Central Bank will also meet this week and are expected to hold rates steady.
Crude oil futures took back lost ground after facing profit-taking following their surge to two-year highs in the previous session on an unplanned closure of the pipeline that carries the largest volume of North Sea crude oil.
Brent crude added 0.8 percent, or 51 cents, to $63.85 a barrel, after shedding 2 percent on Tuesday. U.S. crude added 0.7 percent, or 38 cents, to $57.52, after slipping 1.4 percent overnight.
Reporting by Lisa Twaronite; Editing by Simon Cameron-Moore