* European share markets seen opening lower

* Passage of US healthcare bill seen doubtful

* Fading expectations of US rate hike by year-end hit dollar

By Lisa Twaronite

TOKYO, July 18 (Reuters) - Asian shares stepped back from more than two-year highs on Tuesday while the dollar extended losses as passage of a U.S. healthcare bill grew doubtful, and as investors bet the Federal Reserve will be more cautious about raising interest rates.

MSCI's broadest index of Asia-Pacific shares outside Japan fluttered between positive and negative territory and last was slightly higher. But it remained well shy of its loftiest levels since April 2015, scaled in the previous session.

Republican Senators Jerry Moran and Mike Lee announced their opposition on Monday to U.S. legislation to dismantle and replace the Affordable Care Act, commonly known as Obamacare, leaving it without enough votes to pass.

U.S. S&P stock futures edged down slightly after the news, and were last off 0.1 percent.

In Europe, futures for the Eurostoxx 50 and the DAX were both down 0.4 percent, while the FTSE was 0.3 percent lower.

Wall Street ended little changed on Monday in low-volume trading, as investors braced for a flood of second-quarter earnings reports later this week.

Overall Asian sentiment remained underpinned by solid China data on Monday, which showed its economy expanded at a faster-than-expected 6.9 percent clip in the second quarter, setting the country on course to comfortably meet its 2017 growth target.

Chinese shares on Tuesday faced profit-taking as well a sell-off in small-caps. Both both the blue chip CSI300 index and the Shanghai Composite Index were down in the morning, then turned marginally up.

"At the end of this month, corporate China has to pay their tax bill, so you have people taking money off the table and liquidating," said Gavin Parry, managing director at Parry International Trading Limited in Hong Kong.

The dollar, already down in early trade, extended losses. It slipped 0.5 percent on the day to 112.14 yen, well below its nearly four-month high of 114.495 touched last week.

The euro jumped 0.4 percent to $1.1522, after earlier pushing to its highest since May 2016.

The Australian dollar surged 1.5 percent to two-year highs after minutes of the last meeting of the country's central bank showed policymakers turned more upbeat on the economic outlook.

The dollar index, which tracks the greenback against a basket of six major rivals, wallowed at 94.791, down 0.2 percent after plumbing its lowest levels since September 2016.

"It's hard to be bullish on the dollar, both from the monetary side and from the U.S. politics side," said Masafumi Yamamoto, chief currency strategist at Mizuho Securities.