* Asia shares up slightly after big fall earlier in week
* U.S. 10-year yield hits 2.75 pct, high since April 2014
* Futures price in 3 Fed rate hikes this year
* Dollar still lacks momentum as focus on ECB, other cenbanks
By Hideyuki Sano
TOKYO, Feb 1 (Reuters) - Asian shares eked out modest gains on Thursday, clawing back sharp losses from earlier this week, however, rising U.S. bond yields and interest rates could dampen investors' optimism toward the global economic outlook.
The U.S. Federal Reserve kept interest rates on hold as expected at its first policy meeting in 2018 on Wednesday but flagged interest policy tightening later this year.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent in early trade, slowly recovering after Tuesday's 1.4 percent fall. Japan's Nikkei also gained, rising 0.5 percent from a four-week low hit the previous day.
"The U.S. is cutting tax and spending $1.5 trillion in infrastructure when the economy is really strong. There would be little wonder if the economy overheats," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
The yield on the 10-year U.S. Treasury note - the benchmark for world lending - briefly shot up to 2.754 percent, a level last seen in April 2014.
U.S. interest rate futures are now almost fully pricing in three rate hikes this year, with some now talking about the possibility of four rate hikes.
On Wall Street, the S&P 500 erased earlier gains to end almost flat, up 0.05 percent at 2,823.81. The Dow Jones Industrial Average was up 0.28 percent, however, most of the benchmark's gains were driven by a 4.9 percent rise in index heavyweight Boeing following its strong earnings. Stripping out Boeing's rally, the index would have been down 0.18 percent.
Although rising U.S. yields lent some support for the dollar, the U.S. currency lacked momentum as investors are focusing more on a fresher theme of exit from stimulus in other economies, such as the euro zone.
The euro traded at $1.2415, consolidating after having hit a 3-year high of $1.2538 hit on Jan. 25, as investors bet the European Central Bank will be laying the groundwork for ending its asset purchase and raising interest rates.
The dollar changed hands at 109.23 yen, bouncing off a four-month low of 108.28 hit on Friday.
The British pound fetched $1.4200, after a 5.1 percent gain in January, its biggest since May 2009, owing to broad dollar weakness and expectations of a Brexit deal more favourable to the UK.
The Chinese yuan is also strengthening, with the Thomson Reuters/HKEX Global CNY index, rising to 97.11 by Wednesday, its highest level since June 2016, having risen 4.7 percent from its May 2017 low of 92.76.
Oil prices rebounded after their slide earlier this week as strong demand for gasoline and distillate products and news that OPEC countries maintained heavy supply cuts in January offset the impact of rise in U.S. oil inventories.
U.S. crude futures gained 0.3 percent to $64.94 per barrel in early trade after gaining 7.7 percent in January, the best month for the contract since September.
Reporting by Hideyuki Sano; Editing by Sam Holmes