GLOBAL MARKETS-Asian shares struggle under China tightening fears
* China shares underperform after premier flashes tightening signal
* Fed officials offer no fresh clues on timing of stimulus withdrawal
* Investors await U.S. GDP, payrolls data later this week
* Euro under pressure ahead of Thursday's ECB meeting
* Australian shares extend gains after RBA holds steady as expected
TOKYO, Nov 5 (Reuters) - The dollar gained against a basket of currencies and Asian shares gave up early gains, dragged lower by China shares after Chinese Premier Li Keqiang signalled a shift towards monetary tightening ahead of a key Communist Party policy meeting.
The safe-haven bid pushed up the yen, while the euro continued to languish on rising expectations that the European Central Bank will cut rates further, with a few strategists and investors saying action could come as early as its policy meeting on Thursday.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped about 0.2 percent, while Japan's Nikkei stock average edged down.
Australian shares rose 0.8 percent, moving back toward a five-year high hit last month after the Reserve Bank of Australia kept its cash rate steady at a record low of 2.5 percent as widely expected.
But the Shanghai Composite Index slid 0.4 percent and Hong Kong's Hang Seng Index shed 0.7 percent, after Premier Li said in speech published in full late on Monday that China needs 7.2 percent economic growth to generate 10 million jobs.
Adding extra stimulus would be more difficult since printing new money would cause inflation, Li said in the speech, which was delivered on Oct. 21. His published remarks came as China's leaders prepare to meet from Nov. 9 to Nov 12 at key plenum that will discuss deepening reforms.
"His comments are different from what people were expecting. He definitely sounds more hawkish now and this is a shift from what he said earlier this year about bottom-line growth," said Hong Hao, chief strategist, Bank of Communications International.
U.S. S&P E-mini futures fell 0.1 percent, after the S&P 500 Index closed up 0.4 percent on Monday, just shy of a record high, as a spate of comments from Federal Reserve officials offered investors no reason to believe a rollback of the U.S. stimulus programme was imminent.
ECB, U.S. PAYROLLS REPORT AWAITED
The dollar index, which measures the greenback against six major currencies, gained 0.1 percent to 80.625, holding well above a nine-month low of 78.998 hit on Oct. 25.
Against the Japanese currency, the dollar was fell 0.2 percent to 98.42 yen.
The euro slipped 0.1 percent to $1.3501, holding above Monday's low of $1.3441, which was its lowest since Sept. 18, but remaining well below a nearly two-year high of $1.3832 set on Oct. 25, as investors began to price in the likelihood of ECB easing action.
Money markets were already pricing in the possibility of looser ECB policy in the coming year and began to show a chance of a cut in the next few months, and a few big banks expect a cut as early as this week.
A rate cut would hurt the euro's yield advantage over other currencies and make it less appealing for investors.
"We expect the ECB to leave its interest rates and forward guidance unchanged at Thursday's meeting," strategists at Barclays wrote in a note to clients.
"However, the latest decline in inflation has raised the likelihood that the main refinancing rate could be cut again by 25 basis points in December," they added.
The ECB last lowered its refinancing rate in May, to a record low of 0.5 percent.
In addition to the ECB, investors will continue to focus on U.S. data for clues on the timing of when the U.S. central bank will begin to taper its monthly purchases of $85 billion in assets.
On Friday, the closely-watched October non-farm payrolls data will be released. Fed policymakers want to see the unemployment rate dropping closer to 6.5 percent from the current 7.2 percent, but economists in a Reuters survey expect the rate to have edged up in October to 7.3 percent.
Ahead of the jobs report, third-quarter gross domestic product data will be published on Thursday. Those figures will help show how strong the momentum in the economy was before last month's partial government shutdown.
Data on Monday showed orders for a wide range of U.S.-made capital goods fell more than expected in September, suggesting companies cut their investment plans. But other recent data indicated that factory activity accelerated in October.
Eric Rosengren, president of the Boston Fed, said late on Monday that it may be appropriate to reduce the quantitative easing program when there is "compelling evidence of a sustainable recovery making satisfactory progress toward full employment."
Earlier on Monday, St. Louis Fed President James Bullard said the central bank need not rush because inflation remains low, while Fed Board Governor Jerome Powell said the tapering timing "is necessarily uncertain, as it depends on the evolution of the economy."
In commodities trading, spot gold edged up to $1,315.85 an ounce.
Copper added 0.5 percent to $7,181.50 a tonne from the previous session, when it fell 1.4 percent.
U.S. crude also edged up slightly to $94.72, but stuck close to four-month lows touched on Monday on worries about growth in demand after a survey showed U.S. oil inventories were rising.