By Hideyuki Sano

TOKYO (Reuters) – Asian shares slipped to one-month lows on Tuesday as the specter of higher borrowing costs in the United States and slower global economic growth prompted investors to trim their exposure to riskier assets.

Over the weekend, financial markets were served a grim reminder of soft patches in the global economy in the form of disappointing Chinese trade figures. Focus now turns to consumer and wholesales price data from China later in the day.

The OECD said in a report on Monday that global trade flows have fallen dangerously close to levels usually associated with a global recession, although steps taken by China and others should ensure a pick-up in 2016.

“After share prices have recovered quite a lot (last month), their rally is coming to a halt for now as markets are trying to price in a Fed rate hike in December,” said Takeru Ogihara, chief strategist at Mizuho Trust Securities.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.4 percent, while Japan’s Nikkei (.N225) dropped 0.8 percent from a 2 1/2-month high hit on Monday.

Surprisingly strong U.S. jobs data released on Friday has dramatically changed investors’ perception on the Federal Reserve’s monetary policy track, with money market futures pricing in more than a 70 percent chance of a rate hike next month.

The 10-year U.S. bond yield touched a 3-1/2-month high of 2.377 percent on Monday and last stood at 2.349 percent.

The two-year Treasuries yield (US2YT=RR) hit 5-1/2-year high of 0.958 percent on Friday and was last at 0.890 percent.

Investors, worried that rising borrowing costs could crimp profit margins of many businesses, took profits from recent gains in global equities.

On Wall Street, the S&P 500 index (.SPX) suffered its worst loss in six weeks on Monday, falling 1.0 percent.

On the other hand, higher U.S. interest rates make parking funds in the dollar more attractive than at present, especially as some of the dollar’s major rivals like the euro have negative interest rates.

A consensus is forming at the European Central Bank to take the interest rate it charges banks to park money deeper into negative territory in December, four governing council members told Reuters.

Such a divergent policy outlook helped to cap the euro and lift the dollar, although the U.S. unit slipped a tad on Monday on profit-taking after sharp gains on Friday.

The dollar’s index fell to 98.956 (=USD) (.DXY) from Friday’s seven-month high of 99.345.

Against the yen, the dollar eased to 123.08 yen (JPY=) from a 2 1/2-month high of 123.60 set on Monday.

The euro ticked up to $1.0761 (EUR=) from Friday’s 6-1/2-month low of $1.07045.

Still, the euro remains vulnerable as Portuguese government bond yields hit a four-month high and shares fell after leftist parties reached agreement on forming an alternative government to try to oust the center-right.

Prime Minister Pedro Passos Coelho acknowledged his government could fall before the vote on its legislative program on Tuesday or Wednesday.

Elsewhere a firmer dollar put pressure on precious metals.

Gold stood at $1,093 per ounce, near its three-month low of $1,085.50 (XAU=) while silver (XAG=) dropped to one-month low of $14.48 per ounce on Monday

Copper (CMCU3) fell to a six-week low of $4,953 per tonne, hit also by concerns about demand from China.

Oil prices extended losses for a fourth straight day on Monday on fresh builds at the delivery point for U.S. crude futures

The front-month in Brent crude futures (LCOc1) last traded at $47.30 a barrel, having slipped more than 7 percent from last week’s high.

(Editing by Shri Navaratnam)