TOKYO (Reuters) - Asian shares and the dollar steadied on Tuesday, after Standard & Poor's removed the near-term threat of another credit rating downgrade for the United States, just as data last week pointed to no imminent shift in the Federal Reserve's huge monetary stimulus.

Still, uncertainty over the timing of the Fed's eventual reduction of its massive bond-buying program, concerns over China's growth outlook and doubts about the sustainability of Wall Street's rally may cap share prices.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 percent, after falling for a fourth consecutive session to a fresh 6-1/2-month low on Monday.

Australian shares inched up 0.2 percent, resuming trading from a holiday on Monday, while South Korean shares opened almost flat. Chinese markets remain closed for a holiday.

European stocks fell and Wall Street ended nearly flat, as investors reassessed equity valuations after U.S. stocks hit record highs and European shares marked multi-year peaks recently, making current levels less attractive than earlier this year and raising doubts about a sustained rally from here.

A resilient U.S. jobs report on Friday appeared to bolster recent views that the Fed would start to roll back its bond-buying program later this year, although most analysts were generally of the opinion that the central bank would need firmer evidence of economic strength before scaling back the stimulus.

On Monday, S&P upgraded the U.S. credit outlook to stable from negative, saying the chances of a downgrade of the country's rating is "less than one in three.

The Bank of Japan ends its two-day policy meeting this session, with markets looking for any signs of further stimulus after a recent plunge in Japanese stocks and a sharp rise in the yen spooked investors. Before the recent setback, Japanese equities enjoyed a record-breaking rally and the yen tumbled to multi-year lows against the dollar on the back of Prime Minister Shinzo Abe's sweeping growth-spurring measures.

The BOJ, which stunned financial markets on April 4 by setting in motion the world's most intense burst of monetary stimulus, is widely expected to keep its policy settings unchanged at the two-day rate review ending on Tuesday. Instead, it is hoping that fine-tuning its market operations will be sufficient to stem market turbulence for now.

The Nikkei average opened down 0.1 percent after soaring 4.9 percent in its best day since March 2011 the previous session, just after briefly entering bear market territory on Friday. The index hit a 5-1/2 year high last month.

The dollar held steady against the yen at 98.79, having reached a high of 99.29 overnight after the S&P's rating move reduced the risk of the world's biggest economy losing its AA-plus rating.

The dollar briefly fell below 95 to a fresh two-month low on Friday, giving up gains made since the BOJ's unprecedented April 4 stimulus. Last month, the U.S. currency hit a 4-1/2-year peak of 103.74 against the yen.

Against a basket of key currencies, the dollar index was up 0.08 percent.

Benchmark 10-year U.S. Treasury yield neared its 13-month-plus peak of 2.235 percent set in late April while the 30-year yield hit a 14-month high of 3.382 percent on Monday.

"We are USD-bullish due to the ongoing Fed tapering debate which has steepened the U.S. yield curve ... Long-term capital flows are now directed towards U.S. corporates, which is USD-positive," Morgan Stanley said in a research.

"Japan's bond volatility has declined, allowing the authorities to return their attention to equity markets and JPY," it added.

Worries about slackening demand from the world's leading consumer China have weighed on the commodity-sensitive Australian dollar, which fell to a 20-month low of $0.9393 on Monday. The Aussie was at $0.9430 on Tuesday.

U.S. crude futures inched up 0.1 percent to $95.84 a barrel.

(Editing by Shri Navaratnam)

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