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* MSCI Asia-ex Japan share index hits 17-month low

* Oil set to snap 3-day decline, trading above $113

* Japan's economy shrinks by 0.6 percent in Q2 (Updates prices, adds European outlook)

By Kevin Plumberg

HONG KONG, Aug 13 (Reuters) - Asian stocks dropped on Wednesday, with shares outside Japan falling to a 17-month low, on the growing risk of a sharp global slowdown, while the U.S. dollar held near six-month highs against major currencies.

Crude oil prices staged a small rebound to above $113 a barrel, set to snap a three-day decline. Oil prices have dropped 23 percent from a record above $147 a month ago.

European stock markets were expected to open as much as 0.5 percent lower, according to financial bookmakers, as investors feared what started as an economic slowdown centered in the United States has become much more global.

Data showing Japan's gross domestic product contracted in the second quarter added to a sense of unease about growth prospects and reinforced concerns that the world's second-largest economy may have slipped into a recession. [ID:nT66849]