* China, Japan shares lead regional markets lower

* Crude oil futures edge lower after losses

* Fed Chair Janet Yellen eyed after recent hawkish comments

By Saikat Chatterjee

HONG KONG, May 24 (Reuters) - Asian shares stumbled to near 2-1/2-month lows on Tuesday and the U.S. dollar pared some of its recent losses as investors worried about the likelihood of a U.S. interest rate increase in coming weeks.

MSCI's broadest index of Asia-Pacific shares outside Japan slid 0.5 percent, taking its losses to more than 7 percent so far this month and nearing its lowest levels since March 9.

Financial spreadbetters at IG expected Britain's FTSE 100 to open 0.3 percent lower, Germany's DAX 0.2 percent and France's CAC 0.4 percent.

"The market seems to be taking a cautious stance ahead of the Fed Chair Janet Yellen's speech later this week," said Jung Sung-yoon, a foreign exchange analyst at Hyundai Futures.

A string of comments in recent weeks by Federal Reserve officials and minutes of the last Fed meeting have put a possible rate hike firmly on the table for June or July, reviving the dollar but cooling appetite for riskier assets, even if markets are not totally convinced a tightening will come so soon.

Philadelphia Fed President Patrick Harker said on Monday that a hike in June is appropriate unless data weakens, while St. Louis Fed President James Bullard said holding rates too low for too long could cause financial instability.

With economic growth across emerging markets showing fresh signs of flagging - ratings agency Moody's expects growth in G20 emerging markets to ease to 4.2 percent in 2016 compared to 4.4 percent last year - investors are growing more bearish on the outlook for stocks.

Shares in China and Japan led regional markets down with 0.7 percent losses each, though some investors were wary of chasing markets lower after their recent retreat.

Yang Hai, analyst at Kaiyuan Securities, said trading will likely remain dull for a while as economic sluggishness discourages investor participation.

"The current economic environment doesn't justify a sustainable rebound. In addition, regulators are reducing leverage in the asset management industry so money is not flowing in."

The dollar trimmed some of its losses against the yen after skidding nearly 1 percent in the previous session to a low of 109.12. It was last up 0.04 percent at 109.40 yen, moving back toward Friday's three-week high of 110.59.

Data on Monday showed Japan posted a trade surplus for the third consecutive month, and a Group of Seven finance ministers' meeting concluded on Saturday with a U.S. warning to Japan against intervention to weaken the yen.