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GLOBAL MARKETS-Asian shares hit 2-week lows, dollar gains as investors scurry for cover

* MSCI ex-Japan falls for second day in a row, down 1.3%

* U.S. dollar edges to near 4-month highs

* European stocks set for weaker open

* Investors worried about coronavirus lockdowns in Europe

* Oil steadies after hefty losses on Tuesday, gold shines

SYDNEY, March 24 (Reuters) - Asian shares skidded to a two-week trough on Wednesday and the dollar neared four-month highs as coronavirus lockdowns in Europe and potential U.S. tax hikes hit risk appetite, leading to a flight to safety.

U.S. and European stock futures were weaker in late Asian trading. E-Mini futures for the S&P 500 were down 0.1%, London’s FTSE futures were 0.65% lower while eurostoxx 50 futures lost 0.6%.

MSCI’s broadest index of Asia-Pacific shares outside of Japan fell 1.3% after losing 0.9% on Tuesday. It went as low as 674.18 points, a level last seen on March 9.

The index has had a disappointing run in March after five straight months of gains, as risk assets were earlier spooked by fears inflation will pick up at a faster-than-expected pace led by successful coronavirus vaccine rollouts and massive U.S. fiscal stimulus.

Japan’s Nikkei stumbled 2% while South Korea’s KOSPI slipped 0.4%. Chinese shares were in the red for a second day with the blue-chip CSI300 index down 1.65%. Hong Kong’s Hang Seng skidded 2.2%.

On Wall Street overnight, the Dow Jones Industrial Average fell 0.94%, the S&P 500 lost 0.76% and the Nasdaq Composite dropped 1.12%.

“We continue to stress that the economic outlook remains tied to the path of the virus,” said Kim Mundy, senior economist & currency strategist at Commonwealth Bank.

“The risk is that the more contagious and deadly strain of the virus elicits a stronger response from European governments which sees Europe remaining locked down for longer.”

Germany extended its lockdown to April 18. A U.S. health agency said the AstraZeneca Plc vaccine developed with Oxford University may have included outdated information in its data, further fueling investor concerns over the recovery.

Adding to investor woes, Treasury Secretary Janet Yellen told Congress on Tuesday the U.S. economy remained at risk.

In currencies, the dollar index approached a four-month top of 92.506 against a basket of most major currencies.

The euro edged toward a four-month trough below $1.18355 - trading as low as $1.18360 - after Germany extended its lockdown. The safe-haven yen was broadly stronger, and Australia’s dollar - considered a liquid proxy for risk - slipped as low as $0.7583, a level not seen since Feb.5.

U.S. manufacturing data was due later on Wednesday and Powell was expected to give the same prepared testimony to a Senate banking panel.

The flight to safety hit commodity prices, though oil prices edged higher on Wednesday as investors looked for bargains. Gains were capped, however, as lockdowns in Europe and a build in U.S. crude stocks curbed risk appetite and raised oversupply fears.

Brent crude futures rose 22 cents to $61.01 a barrel, after tumbling 5.9% and hitting a low of $60.50 on Tuesday. West Texas Intermediate (WTI) crude futures added 17 cents to $57.93, having lost 6.2% the previous day.

Safe haven gold was higher at $1,729.3 an ounce. (Reporting by Swati Pandey in Sydney and Chris Prentice in Washington; Editing by Stephen Coates and Lincoln Feast.)

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