* Asia shares fall; Europe, U.S. futures rise * Investors cautious ahead of Trump's Jan. 20 inauguration * Resilient dollar leaves yen struggling (Updates to Asia afternoon) By Rae Wee SINGAPORE, Jan 2 (Reuters) - Asian stocks began the year on a dour note on Thursday as they struggled for traction after a jittery close to 2024, while the U.S. dollar held steady and investor sentiment stayed cautious ahead of Donald Trump's return to the White House. The start of the New Year was shaping up to be a less favourable one for equities, as uncertainty over the policies of incoming U.S. President Trump and a more hawkish Federal Reserve outlook looked set to dominate the market rhetoric for now. While global shares .MIWD00000PUS closed out 2024 with a strong yearly gain of nearly 16%, they had clocked a monthly loss of more than 2% in December. The same was the case for MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS , which slid 1.2% in December though registered a gain of more than 7% for 2024. The index was last down 0.58% in the Asian session on Thursday, with volume thinned given a trading holiday in Japan. However, stock futures pointed to a positive opening for Europe and Wall Street. EUROSTOXX 50 futures STXEc1 gained 0.74%, while FTSE futures FFIc1 ticked 0.05% higher. S&P 500 futures ESc1 edged 0.48% higher. Nasdaq futures NQc1 advanced 0.67%. "I think we're now in a bit of a twilight zone between now and January 20," said IG market analyst Tony Sycamore. Trump will be sworn in as president of the United States on Jan. 20 for his second term in office. "It's very unusual for stocks not to get a positive December ... and that worries me a little bit, because when markets don't go up at times like this when they should be going up, it generally means that there are other concerns," said Sycamore. "There's a pretty common consensus out there that Trump's going to run the economy red hot." Chinese stocks were battered, with the CSI300 blue-chip index .CSI300 last down 2.65% while the Shanghai Composite Index .SSEC lost 2.36%. Hong Kong's Hang Seng Index .HSI slid 2.15%. Investors are closely monitoring China's economic recovery in 2025 after officials pledged a slew of support measures to promote growth, though Trump's talk of tariffs in excess of 60% on imports of Chinese goods could pose significant headwind. "To avoid a more material slowdown as domestic obstacles and external pressures look set to mount, China will remain heavily reliant on policy support," said Yingrui Wang, China emerging market economist at AXA Investment Managers. "With Donald Trump's return to the White House amplifying external risks and an already fragile domestic economy, a debt-deflation trap leading to a generational downturn could be perilously close if upcoming stimulus measures are delayed or misdirected." Elsewhere, South Korea's KOSPI .KS11 was flat. The index was Asia's worst performer in 2024, with a loss of more than 22% in dollar terms owing in part to a deepening political crisis. DOLLAR STEADY All that global uncertainty, along with expectations of fewer Fed interest rate cuts this year, left the safe-haven dollar hovering near a two-year peak on Thursday. A wide interest rate difference between the U.S. and other economies has cast a shadow over the foreign exchange market, resulting in most currencies declining sharply against the dollar in 2024. The dollar rose 0.14% to last trade at 157.18 yen JPY=EBS , leaving the Japanese currency sliding toward its lowest level in more than five months. FRX/ The euro EUR=EBS ticked 0.08% higher to $1.03615 but strayed not too far from a more than one-month trough. Markets are now pricing in about 42 basis points worth of rate cuts from the Fed this year 0#USDIRPR , compared with more than 100 bps from the European Central Bank 0#EURIRPR and 60 bps from the Bank of England 0#GBPIRPR . "We now expect the Fed to make just two 25 bps cuts in 2025 by skipping cuts in January and May, and instead cutting in March and possibly June," said Eli Lee, chief investment strategist at Bank of Singapore. Trading of cash U.S. Treasuries was closed on Thursday owing to the Japan market holiday, but futures TYc1 were little changed. "We see further upward pressure on long-dated U.S. Treasury yields and have a 12-month 10Y UST yield forecast of 5.00%," said Lee. In commodities, oil prices nudged higher on Thursday, with Brent crude futures LCOc1 up 0.25% to $74.83 a barrel. U.S. West Texas Intermediate crude CLc1 gained 0.28% to $71.92. O/R Spot gold XAU= traded 0.34% higher at $2,632.68 an ounce. The yellow metal had a banner year in 2024, surging more than 27% in its largest annual gain since 2010. GOL/ <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates YTD http://tmsnrt.rs/2egbfVh Asian stock markets https://tmsnrt.rs/2zpUAr4 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Rae Wee; Editing by Christopher Cushing) ((Rae.Wee@thomsonreuters.com;))