By Lisa Twaronite
TOKYO (Reuters) - Asian shares gave back some of this week's China-inspired gains on Tuesday, while oil prices slipped as traders lowered their expectations of a significant output cut at this week's OPEC meeting.
Financial spreadbetter IG expected Britain's FTSE 100 (FTSE) to open unchanged to 0.1 percent higher, with Germany's DAX (GDAXI) and France's CAC 40 (FCHI) seen up as much as 0.2 percent.
"Yesterday's euphoric reaction to China's easing measures has proved to be short lived as equities around the region experience some downside today," Melbourne-based IG Markets strategist Stan Shamu said in a note.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) was down 0.3 percent after rallying in the previous session following China's surprise interest rate cut on Friday.
Japan's Nikkei stock average (N225) added 0.3 percent, even in the face of a stronger yen which usually weighs on shares.
Markets in Japan were closed on Monday for a national holiday, and were playing catch-up to the unexpected reduction in interest rates from the People's Bank of China.
Sources told Reuters that Beijing was ready to take further easing steps to reduce financing pressure on companies and avert a sharper economic slowdown.
On Tuesday, China's central bank lowered the yield for a key short-term money rate, the fourth time it has done so this year, as regulators step up efforts to reduce funding pressure for Chinese companies.
On Wall Street on Monday, both the Dow Jones industrial average (DJI) and the S&P 500 (SPX) marked fresh record closing highs.
Oil prices lost more ground ahead of a much-anticipated meeting of the Organization of the Petroleum Exporting Countries later this week.
"The reduced leverage that OPEC now has over the oil market is likely to make it more cautious about cutting production," strategists at Barclayss said in a note.
"The rapid growth being achieved in non-OPEC production means it faces the risk that even a large cut to supply may not be enough to support prices and could simply result in lost market share and revenue," they said.
Russia, which needs higher oil prices to support its economy, tried to sway OPEC to slash production, suggesting Moscow could cut its own crude output.
U.S. crude
The dollar gave up its early modest gains against the yen, edging down about 0.3 percent to 117.91 yen USD/JPY=> and moving away from its seven-year high of 118.98 touched on Thursday.
The yen has come under renewed pressure since late last month, when the Bank of Japan stunned markets by expanding its massive stimulus program. Minutes of the Oct. 31 meeting released on Tuesday showed BOJ Governor Haruhiko Kuroda proposed the additional steps.
"The central bank minutes showed that there was some concern expressed about the weak yen and that seems to have taken dollar/yen off its stride," said Shinichiro Kadota, chief Japan FX strategist at Barclays in Tokyo.
In a speech on Tuesday, Kuroda stressed the bank's readiness to expand stimulus further to meet its inflation goal.
On the U.S. data front, financial data firm Markit said on Monday that its "flash" services Purchasing Managers Index hit 56.3 in November, slightly below expectations and the lowest since April, as growth in new business slowed.
The euro fell about 0.1 percent to $1.2427 EUR/USD=>, moving back toward a two-year low of $1.2358 touched on Nov. 7.
European Central Bank Governing Council member Christian Noyer said in Tokyo on Tuesday the central bank's statements on the size of its balance sheet are not a firm commitment but an expectation of how large the balance sheet will grow.
Noyer's comments followed a warning from the head of the Bundesbank on Monday that the European Central Bank would face legal obstacles if it went down the path of quantitative easing to bolster euro zone prices and growth.
Jens Weidmann, who also sits on the ECB's Governing Council, raised questions over the ECB's ability to deliver the measures that ECB President Mario Draghi indicated were possible, hinting at disagreement within the ECB ahead of its next meeting on Dec. 4.
Also on Monday, a report showed German business sentiment rebounded in November after six straight declines.
(Additional reporting by Shinichi Saoshiro in Tokyo; Editing by Shri Navaratnam & Kim Coghill)