* Asian shares give up early gains as China slips
* Spreadbetters expect lower opening for Europe
* Yellen comments seen as hawkish, buoys dollar
By Shinichi Saoshiro
TOKYO, July 17 (Reuters) - Asian equities dipped on Thursday, giving up earlier modest gains as Chinese shares fell, while the euro probed recent lows against the dollar amid speculation the U.S. Federal Reserve was tilting towards tighter monetary policy.
Spreadbetters expected European stock markets to follow suit, forecasting Britain’s FTSE 100 would open as much as 0.25 percent lower, Germany’s DAX down 0.15 percent and France’s CAC 40 off 0.3 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.2 percent after rising earlier in the session after another record closing high on Wall Street.
The Shanghai Composite Index fell 0.8 percent as investors moved from blue chips to some beaten-down growth stocks and kept money aside for initial public offerings (IPOs).
“Although the overall economy and liquidity conditions are improving, there’s still a lack of confidence for investors to put more funds into the A-share markets,” said Guo Yanling, senior analyst at Shanghai Securities.
Tokyo’s Nikkei shed 0.2 percent and Hong Kong’s Hang Seng lost 0.4 percent.
The dollar was generally higher after disappointing economic reports in Europe and comments by Federal Reserve Chair Janet Yellen this week that suggested rate rises may come sooner than expected, with signs a recovery in the economy was taking hold.
The dollar was little changed at 101.50 yen, having gained about 0.4 percent so far this week against the Japanese currency.
The euro stood at $1.3523, not far from a one-month low of $1.3520 hit the previous day.
Data suggesting a shaky start for Germany in the new quarter and underlying wariness about banking problems in Portugal have kept the euro on the back foot this week.
The focus was on whether the euro could hold above the $1.35 threshold, which if breached would take the single European currency to a five-month trough.
Kathy Lien, managing director at BK Asset Management, said it was important to recognise fundamental reasons the euro refused to break $1.35, such as falling U.S. yields, a massive current account surplus and benefits from the diversification of currency reserves.
“Therefore, without a significant rally in U.S. yields or a strong signal from the ECB that further easing is imminent, a move below $1.35 could be fake-out instead of a breakout,” she wrote in a note to clients.
U.S. Treasury yields, seen as central to the dollar’s appeal in currency markets, were initially higher on Wednesday but then slipped.
In the monetary policy landscape, the euro zone stands in stark contrast to Britain, where expectations are for a rate rise later this year.
Reflecting such differing expectations, the euro hovered near the 78.88 pence touched on Wednesday, a low not seen since September 2012.
In commodities, U.S. crude oil extended gains after rising more than $1 the previous day after government data showed a sharp fall in U.S. stocks last week. U.S. crude was up 0.25 percent at $101.45 a barrel.
Aluminium held steady after touching a 16-month high on Wednesday in light of upbeat data from top consumer China at a time of producer cutbacks and eroding inventories.
Benchmark three-month aluminium on the London Metal Exchange was up 0.1 percent at $1,972 a tonne after surging to $1,993 on Wednesday, the highest since March 2013.
Shanghai copper fell to its lowest in a fortnight as jitters over a possible bond default in China’s construction sector triggered a round of profit-taking.
The most active September copper contract on the Shanghai Futures Exchange slid 1 percent to 50,050 yuan ($8,100)a tonne.
$1 = 6.2035 Chinese yuan Additional reporting by Grace Li in Hong Kong; Editing by Eric Meijer, Jacqueline Wong and Alan Raybould