GLOBAL MARKETS-Stocks slip, yen gains on downbeat China factory report
* Spreadbetters see European shares skidding at open
* China flash PMI finds manufacturing weaker than expected
* Minutes show Fed still intent on stimulus withdrawal
* Yen pushes higher vs. dollar, euro; dollar index heads for 2014 low
TOKYO, Feb 20 (Reuters) - Asian stocks tumbled on Thursday and the yen firmed as a survey painted a grim picture of China's manufacturing sector, heightening uncertainty about the outlook for the region's economic powerhouse.
The mood was likely to cast a shadow over European trading, with financial spreadbetters predicting Britain's FTSE 100 to open 44 to 51 points lower, or down as much as 0.8 percent; Germany's DAX to open 100 to 110 points lower, or down as much as 1.1 percent; and France's CAC 40 to open 34 to 36 points lower, or down as much as 0.8 percent.
With investors awaiting the latest manufacturing and services flash PMI reports for Germany and France, "We are calling the major bourses weaker," IG market strategist Stan Shamu said in a note to clients.
"Most of the PMI readings are expected to show some signs of improvement, which leaves the single currency vulnerable to any negative surprises. The euro has actually held up fairly well despite the subdued risk tone," Shamu said.
Asian equities were already on the back foot, tracking U.S. losses after minutes of the Federal Reserve's latest policy meeting and a chorus of U.S. central bank officials showed it remained on track to taper its stimulus.
MSCI's broadest index of Asia-Pacific shares outside Japan extended its drop after the China survey, losing 1 percent. Japan's Nikkei stock average ended down 2.2 percent, marking its biggest daily percentage drop in two weeks.
The preliminary China Purchasing Managers' Index (PMI) from HSBC/Markit for February fell to a seven-month low of 48.3 in February from January's final reading of 49.5, as employment fell at the fastest pace in five years.
While the Lunar New Year holiday likely affected the results, and recent rises in China's exports and bank lending assuaged some anxieties, the latest report followed a series of PMIs in January that showed growth in China's manufacturing and services sectors at multi-month or multi-year lows. Sustained weakness would put the onus on Chinese policymakers to act.
"The upcoming annual parliamentary meetings in early March will take on bigger importance now," said Linus Yip, a Hong Kong-based strategist at First Shanghai Securities.
"You have to expect Beijing to act if the economy slows down more from here, because they cannot proceed with their reform agenda without maintaining a certain level of growth."
Rekindled China worries, combined with concern about the impact of Fed stimulus withdrawal, pressured emerging Asian currencies, with the South Korean won leading losses.
Sentiment in Tokyo was further darkened by Japan posting a record trade deficit in January, as export growth slowed and imports outpaced shipments as a weak yen boosted import costs.
On Wall Street on Wednesday, the Dow Jones industrial average, the Standard & Poor's 500 Index and the Nasdaq Composite Index all skidded, following release of the Fed minutes.
The minutes showed members on the Fed's policy setting committee emphasized their commitment to trimming the central bank's asset-purchase programme in predictable $10-billion steps.
Three Federal Reserve officials on Wednesday said they believe the U.S. economy is gaining traction despite a recent slowdown caused by bad weather, allowing the central bank to stick to its plan to wind down bond-buying this year.
The yield on benchmark 10-year Treasury notes fell to 2.710 percent after the China flash PMI report, compared with Wednesday's U.S. close of 2.734 percent.
The yen, which often gains in line with investors' aversion to risk, got a leg up against its rivals after the China flash PMI report. The dollar's early gains unravelled and it slipped about 0.4 percent to 101.85 yen, moving further away from a two-week high of 102.73 yen hit on Tuesday.
The euro lost 0.3 percent to 140.11 yen, after it hit a three-week peak above 141.00 yen on Tuesday.
The dollar index gave up about 0.1 percent to 80.065, moving back toward its Wednesday low of 79.927, which was its weakest since late December.
The euro added about 0.2 percent to $1.3756, not far from the previous session's high of $1.3773, which was its highest peak since Jan. 2.
In commodities markets, U.S. crude gave up earlier gains and shed about 0.1 percent to $103.22 a barrel, moving away from a four-month high hit on Wednesday after forecasts for more cold weather next week.
Three-month copper on the London Metal Exchange dropped 0.8 percent to $7,128 a tonne, moving away from Wednesday's peak of $7,220, its highest since Jan. 27.
"Markets are pretty sensitive to bad news coming out of China, and they probably should be given its role as a major purchaser of copper," said economist James Glenn of National Australia Bank in Melbourne.
Spot gold rose about 0.2 percent to $1,312 an ounce.