* European car shares jump on report on U.S. tariff compromise
* German data, ECB report lifts euro, bond yields
* Oil slips after Trump's Twitter demands for OPEC action
* Markets await U.S. tariffs on China, Fed minutes
* Yuan slips back
* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, July 5 (Reuters) - European shares headed for a third day of gains on Thursday, as reassuring economic data from Germany and a report that its big carmakers could be spared from U.S. tariffs offset another gloomy session for Asia.
Trade war nerves had pegged all of Asia's bourses back with a U.S. deadline to impose tariffs on Chinese imports just a day away, but it was another widely-flagged target - the German car sector - that drove Europe's fast start.
Mercedes-maker Daimler, and BMW Porsche and Volkswagen raced up as much as 5 percent after a newspaper report about a U.S. offer to suspend tariff threats on EU-made cars if the bloc lifts its duties on U.S. ones.
The mood was also helped as German industrial orders saw a stronger-than-expected jump after four months of falls.
The euro briefly topped $1.17 and bond yields also rose on a report that the ECB thinks markets are now too cautious on when it will raise euro zone interest rates next year.
Later in the day, traders will also get the minutes from the recent meeting of the U.S. Federal Reserve where it raised rates for a second time this year and flagged that more are likely.
"The euro is getting a bit of a lift on the German data though the trade concerns will continue to dominate markets with the Fed minutes being the key data point," said Kenneth Broux, a currency strategist at Societe Generale in London.
The overnight slide in Asian markets, in particular Chinese shares which are now deep into 'bear' market territory, highlighted the ongoing angst over U.S. President Donald Trump's trade tariff plans.
On Friday, U.S. tariffs on $34 billion worth of Chinese imports will take effect, and Beijing has promised to retaliate in kind, though it did say overnight that it will "absolutely not" fire the first shot in a trade war.
MSCI's broadest index of Asia-Pacific shares outside Japan , which has been dropping since Monday, ended down 0.5 percent. The index has lost about 2 percent this week, plumbing a nine-month low in the process.
Japan's Nikkei shed 1 percent, South Korea's KOSPI slipped 0.75 percent, Hong Kong's Hang Seng was off 0.9 percent and the Shanghai Composite Index fell 0.9 percent to take its dive since late January to 23 percent.
With Europe advancing though, Wall Street's S&P 500 futures edged up 0.4 percent and Dow futures added 0.3 percent, pointing to a solid start following Wednesday's Independence Day holiday.
"The $34 billion U.S. tariffs figure has been mostly factored by the markets and focus is now on what the United States says on the remaining $16 billion (of a promised $50 billion tariff plan)," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
In currencies, the euro's gain was the dollar's loss. That also helped ease some of the pressure on volatile emerging market currencies, though Turkey's lira went lower again as its prime minister said cutting interest rates was a top priority.
The Chinese yuan was also slightly lower, its recovery from an 11-month low stalling. A rebound in the yuan was triggered in the past two sessions after the country's central bank sought to calm nervous markets and stem the recent tumble.
The longer term direction for the yuan was still unclear. China appears broadly comfortable with a weakening yuan and would intervene only to prevent any destabilising declines or to restore market confidence, policy insiders told Reuters.
"Although we do not believe China will weaponize its currency, we do believe the current trajectory of Chinese yuan depreciation is justified," strategists at Bank of America Merrill Lynch wrote in a note.
The dollar was 0.1 percent higher against the yen at 110.610 yen, though it was sticking in a narrow range ahead of the Federal Reserve minutes that could give fresh clues on central bank's rate hike plans.
In commodities, Brent oil futures were down 0.7 percent at $77.69 a barrel, after U.S. President Donald Trump sent a tweet demanding that OPEC reduce prices for crude.
Brent had risen on Wednesday on a threat from an Iranian commander to disrupt oil shipments from neighboring states if Washington continued to press all countries to stop buying Iranian oil, and a drop in U.S. crude inventories.
"If Trump continues to believe that OPEC are not doing enough, we would not rule out an SPR (Strategic Petroleum Reserve) release from the U.S., or possibly even export restrictions on petroleum products," ING said in a note. (Additional reporting by Saikat Chatterjee, Dmitry Zhdannikov and Shadia Nasralla in London)