* Chinese shares fall after reopening from long break
* Japanese markets closed for public holiday
* Oil ends multi-day winning streak
By Swati Pandey
SYDNEY, May 6 (Reuters) - Shares struggled and the yen gained on Wednesday, with markets in China faltering on their return from a long holiday as investors fretted over Sino-U.S. tensions, while oil ended an extended winning streak on oversupply risks amid weak demand.
Wall Street futures turned negative after starting higher, with E-minis for the S&P500 ESc1 off 0.3%.
China, opening for the first time since Thursday, started on the backfoot with the blue-chip index .CSI300 down 0.6%. Australian shares .AXJO skidded 0.8%.
"There is a distinct risk-off tone to greet China coming back from holiday," said Stephen Innes, chief global markets strategist at AxiCorp.
"With Trump and the company still on the Wuhan Lab rampage, traders are incredibly cautious this morning, weighing all the possible China responses. And the one that would hurt the most would be for China to reduce imports of U.S. oil."
Global financial markets have been caught this month between grim economic figures and worries about worsening U.S.-China relations, and optimism over easing COVID-19 lockdowns in many countries.
U.S. President Donald Trump has repeatedly taken aim at China as the source of the pandemic and warned that it would be held to account.
On Tuesday, he urged China to be transparent about the origins of the novel coronavirus that has killed more than a quarter of a million people worldwide since it started in the Chinese city of Wuhan late last year. Hong Kong's Hang Seng index .HSI added 0.7% while South Korea's KOSPI was also upbeat, rising 1%. Japanese markets were closed for a public holiday.
That left MSCI's broadest index of Asia Pacific shares outside of Japan .MIAPJ0000PUS up 0.3% in relatively light volumes.
On Wall Street overnight, the S&P 500 pared earlier gains after U.S. Federal Reserve Vice Chair Richard Clarida warned that economic data would get much worse before getting better. index .SPX finished 0.90% higher, the Dow .DJI rose 0.6% and the Nasdaq Composite .IXIC added 1.1%.
In currencies, the yen scaled a three-year high against the euro and a seven-week peak on the dollar on Wednesday, after a court decision challenging German participation in Europe's stimulus program and worries about a bumpy global recovery spooked investors. FRX/
Germany's highest court on Tuesday gave the European Central Bank three months to justify purchases under its bond-buying programme, or lose the Bundesbank as a participant in a scheme aimed at cushioning the economic blow from the coronavirus. euro EUR= hit a one-week low of $1.0826 overnight and slumped to a three-year trough of 115.09 yen EURJPY= in Asia, as traders fretted about both the scheme and the euro's future.
The safe-haven yen JPY= cracked through resistance against the dollar to hit a seven-week high of 106.20. The Aussie AUD=D3 and kiwi NZD=D3 slipped slightly on the greenback, though held above 64 cents and 60 cents respectively. The pound GBP= was steady at $1.2431.
The dollar index =USD was flat at 99.810.
Traders will keep an eye for the ADP (NASDAQ:ADP) National Employment Report of private U.S. payrolls on Wednesday. It could foretell the damage to be revealed on Friday in the official U.S. government measure of jobs in April, estimated to show nearly 22 million jobs were lost last month.
In commodities, U.S. crude futures CLc1 slipped 6 cents to $24.5 a barrel after five straight sessions of gains while Brent crude LCOc1 was flat at $30.97. O/R
Oil prices had gained recently as European and Asian countries had ended their lockdowns to halt the coronavirus spread and as producers had axed supply after the demand crunch.
But analysts cautioned the rebalancing of the market would be choppy.
"We're talking about normalisation of supply and demand but we've got a long way to go," said Lachlan Shaw, National Australia Bank's head of commodity strategy.
"There are a lot of supply cuts that have come through. That combined with some early signs of demand lifting has meant the rate of inventory build is slowing."
Spot gold XAU= eased 0.2% to $1,702 an ounce.
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