* Spreadbetters predict a mixed start to European trading
* Investors warily eye Thailand martial law declaration
* Nikkei bucks the downtrend and snaps 4-day losing streak
* Declining trend in U.S. Treasury yields keeps pressure on dollar
By Lisa Twaronite
TOKYO, May 20 (Reuters) - Asian shares slipped on Tuesday despite a solid performance on Wall Street, while the dollar wallowed close to its lowest level against the yen in more than three months.
Spreadbetters predicted a mixed start to the European trading day, with Britain’s FTSE 100 seen opening as much as 0.09 percent higher; Germany’s DAX flat to 0.05 percent higher; and France’s CAC 40 0.2 percent lower.
Europe is “in for a choppy open,” IG market strategist Stan Shamu said in a note. “The opening calls are quite mixed with the periphery facing mild weakness.”
MSCI’s broadest index of Asia-Pacific shares outside Japan slipped about 0.3 percent. But Japan’s benchmark Nikkei stock average bucked the downtrend and tracked overnight gains on Wall Street, ending up 0.5 percent and breaking a four-session losing streak.
Asian investors continued to monitor developments in Thailand, following news the army had declared martial law after six months of anti-government protests. The SET index pared early losses but was still down about 0.8 percent.
The declaration of martial law was intended to restore peace and order and does not constitute a coup, deputy army spokesman Colonel Winthai Suvari told Reuters.
Thailand’s baht initially fell against the dollar but later steadied on what dealers suspected was intervention by the country’s central bank.
Fitch Ratings said martial law was not in itself negative for Thailand’s ratings and could be positive for the economy.
“It may even help to break Thailand out of the political deadlock of the past six months, by which the two sides have failed to agree on arrangements for new elections,” said Andrew Colquhoun, its head of Asia-Pacific Sovereigns.
The dollar was slightly lower against the yen after dropping to its lowest in more than three months overnight. It last bought 101.44 yen, down about 0.1 percent on the day.
It dipped as low as 101.11 yen on Monday, its weakest level since early February, as investors bet that the Bank of Japan will keep policy steady.
The BOJ is set to conclude its latest two-day policy meeting on Wednesday. Governor Haruhiko Kuroda has maintained an optimistic view of the Japanese economy, keeping expectations of further policy easing at bay.
“If Kuroda makes dovish comments tomorrow, then the dollar/yen may manage to stay above the 200-day average. But if he intentionally stresses his optimistic economic views, markets will take it as a sign he accepts a higher yen and a fall in stocks,” said Osamu Takashima, head of FX strategy at Citigroup Securities in Tokyo.
The recent decline in U.S. Treasury yields made dollar-based investments less attractive.
The yield on benchmark U.S. 10-year notes inched up to 2.54 percent in Asia from its U.S. close of 2.53 percent on Monday, but remained close to six-month lows marked on Thursday last week.
On Monday, Dallas Federal Reserve President Richard Fisher and San Francisco Fed President John Williams both reinforced market expectations that the U.S. central bank is in no hurry to hike interest rates.
Minutes of the Federal Reserve’s last policy meeting are scheduled to be released on Wednesday, but are unlikely to give investors any solid clues about the timing of a U.S. interest rate hike.
The euro remained under pressure of its own, after European Central Bank officials signalled that further easing steps are likely to come next month.
The common currency was flat on the day at $1.3708, but remained not far from its low of $1.3648 hit on Thursday, which was its lowest since late February.
In commodities trading, U.S. crude inched up slightly to $102.73 per barrel after the weaker dollar lifted it close to a one-month high in the previous session.
Spot gold was steady at $1,292.04 an ounce. (Additional reporting by Hideyuki Sano in Tokyo; Editing by Eric Meijer & Kim Coghill)