* Spreadbetters see lacklustre start to European trade
* Share markets in China, Hong Kong, Australia skid
* Uncertainty on Greece keeps investors hopeful but wary
* Crude oil futures shake off two-day slide
By Lisa Twaronite and Hideyuki Sano
TOKYO, May 28 (Reuters) - An index of Asian shares fell on Thursday as the Chinese, Hong Kong and Australian markets slipped, while the dollar scaled its highest level against the yen since 2002 on expectations the U.S. Federal Reserve will raise rates this year.
Spreadbetters predicted European shares would tread water just below previous closes, as talks continued about Greece’s ongoing financial crisis. Britain’s FTSE 100 was seen opening between 2 and 5 points higher, Germany’s DAX was expected to open between 4 points lower and 10 points higher, and France’s CAC 40 was seen opening between 11 points lower and 13 points higher.
“With G7 talks underway, we could be lined up for another choppy session with little change amid swinging sentiment between a deal being stuck and bearish talk on Greece’s chances of averting disaster,” Farbod Mimeh, a junior dealer at Capital Spreads in London, said in a note to clients.
G7 ministers and central bank heads began a three-day meeting in the German city of Dresden on Wednesday. Although the Greek crisis is not on the official agenda, it will be discussed on the sidelines.
MSCI’s broadest index of Asia-Pacific shares outside Japan shed about 0.8 percent, extending losses in afternoon trading as Chinese and Hong Kong shares plunged as a growing number of brokerages tightened requirements on the margin financing.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen tumbled 3.2 percent, while the Shanghai Composite Index lost 2.8 percent. Hong Kong’s Hang Seng index shed 2 percent.
Australian shares gave up early gains, with the S&P/ASX 200 index losing 0.2 percent after weaker than expected business spending data suggested that rate cuts were failing to energise the economy as hoped.
Japan’s Nikkei bucked the downtrend, as the weaker yen helped the index log its 10th consecutive rise, the longest winning streak since February 1988. It ended up 0.4 percent, refreshing a 15-year closing high.
The dollar hit its highest level against the yen since late 2002, rising as high as 124.30, and was slightly higher on the day at 123.66.
The dollar’s latest rally was sparked by remarks from Federal Reserve Chair Janet Yellen, who said last Friday that she expected the central bank to raise rates this year as the U.S. economy was set to recover from a sluggish first quarter.
By contrast, many investors expect the Bank of Japan to take additional easing steps later this year, when the Fed is expected to start raising rates.
“Longer term, little stands in the way of further JPY losses,” said Greg Moore, senior currency strategist at RBC in Sydney.
An index tracking the dollar against a basket of six major currencies edged down about 0.3 percent on the day to 97.068 , as the euro recovered from recent lows on hopes of a deal for Greece.
The euro traded at $1.0931, up about 0.3 percent and moving away from a one-month low of $1.0819 touched on Wednesday.
Uncertainty over whether Greece can get the support it needs to make payments to the International Monetary Fund on June 5 is likely to keep investors cautious for now.
Greek officials spoke optimistically on Wednesday of reaching a cash-for-reforms deal, with economy minister George Stathakis saying Greece and its international creditors have converged on key points.
But German Finance Minister Wolfgang Schaeuble said there was not much progress and that he was surprised by the upbeat tone from some Greek government officials.
Crude oil prices recovered after a two-day slide, although the firmer dollar kept markets under pressure.
Brent crude futures climbed about 0.7 percent to $62.49 a barrel, while U.S. crude futures were up 0.3 percent at $57.69 per barrel. (Additional reporting by Samuel Shen and Pete Sweeney in Shanghai and Ayai Tomisawa in Tokyo; Editing by Jacqueline Wong, Richard Borsuk and Simon Cameron-Moore)