By Dominic Lau
TOKYO, Jan 7 (Reuters) - Asian shares stabilised on Tuesday after four straight days of losses, while the dollar was on defensive after disappointing U.S. services sector data raised concerns about stuttering growth in the world's largest economy.
MSCI's broadest index of Asia-Pacific shares outside Japan was flat, having fallen 2.3 percent in the previous four sessions.
Japan's Nikkei index pointed to a softer open after futures fell 0.6 percent overnight, extending a 2.4 percent decline on Monday, its first trading day of 2014.
U.S. stocks slipped on Monday after a mixed batch of economic reports, resulting in the Standard & Poor's 500 losing in the first three trading sessions of 2014 after ramping up 30 percent last year.
Data from the Institute for Supply Management showed the pace of growth in the U.S. services sector slowed for a second straight month in December with business activity expanding at a lower rate and new orders contracting.
A separate report from financial information firm Markit said its services sector purchasing managers index eased slightly in December from the prior month, but data from the U.S. Commerce Department showed new orders for factory goods rebounded in November, as expected.
All eyes in the market will be on Friday's nonfarm payrolls data, which will provide new clues on how well the U.S. economy is recovering and how fast the Federal Reserve might unwind its stimulus programme, which it began to taper last month, and how long it will keep its interest rates low.
"No more than 20 percent of investors think that there is a serious chance that the Fed will hike before the middle of 2015," Steven Englander, global head of G10 FX strategy at Citibank, wrote in a note.
"A nonfarm payroll print of 250K or more would raise alarm among investors that the recovery was getting out of hand and that the Fed would be behind the curve."
He said commodity and emerging currencies would be sold off in such a scenario, while the euro and the Swiss franc could be a safe haven.
The euro was steady at $1.3629, taking a pause after coming off a four-week low of $1.35715 set on Monday.
The greenback was also little changed at 104.26 yen, having fallen 0.6 percent in the previous session after the soft U.S. services data.
Before Friday's jobs report, investors will focus on the minutes of the Fed's December policy meeting, due out on Jan 8, and the European Central Bank's policy gathering on Thursday.
Among commodities, U.S. crude futures added 0.1 percent to $93.56 a barrel after having fallen 0.6 percent overnight to a one-month low.
Gold was steady at $1,237.71 an ounce, taking a breather after five straight days of gains and sitting not far from a three-week high of $1,248.30 set on Monday.