GLOBAL MARKETS-Asian stocks hobbled by fading expectations for aggressive Fed rate cut

* Markets now expect 25 bp cut from Fed this month
* Asian shares little changed ahead of Powell's testimony

By Hideyuki Sano
TOKYO, July 9 (Reuters) - Asian stocks struggled to rebound
on Tuesday as investors came to terms with sharply reduced
expectations the Federal Reserve will deliver a large interest
rate cut at the end of July.
Those views were bolstered after solid gains in U.S. jobs
for June and pushed down Wall Street for the second straight
day.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS ticked up 0.1% in early trade, after falling
0.6% the previous day. Japan's Nikkei .N225 rose 0.5% thanks
in part to the yen's retreat against the dollar.
On Wall Street, the S&P 500 .SPX lost 0.48% while the
Nasdaq Composite .IXIC dropped 0.78%, led by fall in Apple Inc
AAPL.O .
Money market futures 0#FF: are still fully pricing in a 25
basis point cut at the Fed's next policy meeting on July 30-31,
but have almost priced out a larger 50 basis point reduction.
"The headline payrolls figures was pretty strong but wages
were tepid, so on the whole a 25 basis-point cut would be
justified as an pre-emptive move and I think the current market
pricing is fair," said Naoya Oshikubo, senior economist at
Sumitomo Mitsui Trust Asset Management.
Investors' focus is shifting to Fed Chairman Jerome Powell's
testimony before Congress later in the week for clues on
monetary policy.
In the currency market, fading expectations of aggressive
easing by the Fed helped the dollar.
The euro traded at $1.1215 EUR= , near Monday's low of
$1.1207, its weakest level since June 19.
The dollar changed hands at 108.75 yen JPY= , having risen
up to 108.81 yen in the previous session, its highest in more
than a month.
The British pound stood at 1.2518 GBP=D4 , not far from
six-month lows of $1.2481 touched on Friday.
Oil prices were slightly softer as concerns about whether
slowing global economic growth would hit oil demand eclipsed
tensions over Iran's nuclear programme.
Brent crude LCOc1 futures fell 23 cents, or 0.36% to
settle at $63.88 a barrel. U.S. West Texas Intermediate (WTI)
crude CLc1 futures shed 19 cents, or 0.33% to settle at $57.47
a barrel.

(Editing by Shri Navaratnam)