* Asia shares ex-Japan swing lower, Nikkei retreats
* Markets price in more Fed tightening after minutes
* Treasury yields rise to cycle highs, help dollar rally
* Early Feb readings on global manufacturing upbeat
By Wayne Cole
SYDNEY, Feb 22 (Reuters) - Asian shares slipped on Thursday as the risk of faster hikes in U.S interest rates lifted short-term Treasury yields to the highest in almost a decade and boosted the dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.35 percent in early trade, while E-Mini futures for the S&P 500 lost 0.2 percent.
Japan's Nikkei shed 1 percent even as the yen gave back some of its recent gains on the dollar.
On Wall Street the Dow had ended Wednesday down 0.67 percent, while the S&P 500 fell 0.55 percent and the Nasdaq 0.22 percent.
The retreat came after minutes of the Federal Reserve's last policy meeting showed the usual concerns that inflation might disappoint, but also an expectation of faster economic growth due to fiscal stimulus.
In particular, members agreed that "the strengthening in the near-term economic outlook increased the likelihood that a gradual upward trajectory of the federal funds rate would be appropriate."
That led investors to narrow the odds on faster hikes with a host of Fed fund futures hitting contract lows. Three rate rises are now almost fully priced in for this year, compared to two as recently as December.
"Participants saw a more favourable outlook as supporting gradual rate hikes," noted Barclays analyst Michael Gapen.
"Since then, more stimulus has arrived and there is some tentative, though not conclusive, evidence of stronger wage and inflation data," he added. "We continue to expect four rate hikes in 2018 and 2019."
That risk was not welcome in the Treasury market where yields on 10-year notes touched their highest in four years, and those on two-year paper the highest in nine.
Yields on 10-year debt were last trading at 2.95 percent and creeping ever closer to 3 percent - a huge psychological milestone for bulls and bears alike.
For once, the lift in yields seemed to benefit the U.S. dollar which was up at 90.134 against a basket of currencies having rallied 0.47 percent overnight.
The dollar extended its bounce on the yen to 107.68, a marked turnaround from last week's 105.545 low.
The euro slipped to $1.2274, from a $1.2359 top on Wednesday and looked in danger of testing its February trough at $1.2204.
The next hurdle will be minutes from the European Central Bank's last meeting with markets wary in case there is more talk of an eventual winding back on stimulus.
Higher bond yields were a deadweight on gold, which pays no return, and left the metal at $1,325.20 an ounce.
Industrial commodities including copper fared better as the first round of flash readings on manufacturing for February showed global activity in rude health.
In oil markets, U.S. crude futures fell 50 cents to $61.18 a barrel in early Asian trade. Brent had yet to trade at $65.42.
Reporting by Wayne Cole; Editing by Eric Meijer