GLOBAL MARKETS-Asia stocks gain, dollar droops as Fed chair sets stage for rate cut

* MSCI Asia-Pacific index up 0.75%, Nikkei adds 0.35%
* Fed chair remarks revive some bets on aggressive rate cut
* Dollar and U.S. Treasury yields sag after Powell comments
* Crude prices hit 7-week highs
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Shinichi Saoshiro
TOKYO, July 11 (Reuters) - Asian stocks gained and the
dollar drooped on Thursday after Federal Reserve Chair Jerome
Powell reinforced prospects of a U.S. interest rate cut later
this month.
In an appearance before his congressional overseers on
Wednesday, Powell confirmed that the U.S. economy is still under
threat from disappointing factory activity, tame inflation and a
simmering trade war. Powell said the central bank stands ready to "act as
appropriate".
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.8%, while Japan's Nikkei .N225 added
0.4%.
The Shanghai Composite Index .SSEC advanced 0.8%, South
Korea's KOSPI .KS11 climbed 1% and Australian stocks .AXJO
edged up 0.3%.
U.S. stocks ended higher on Wednesday and the S&P 500 .SPX
briefly crossed the 3,000-point mark for the first time
following Powell's remarks. .N
"The markets had hoped for Powell to express dovish views
and they got what they wanted," said Masahiro Ichikawa, senior
strategist at Sumitomo Mitsui DS Asset Management.
"The focus going forward is U.S. data, such as tonight's
CPI, and whether the economy warrants a 50 basis point rate cut
this month."
A strong June U.S. jobs report released earlier this month
had curbed market expectations that the Fed could lower rates by
50 basis points (bps), and the markets had viewed a 25 bps cut
as a more likely option.
But the Fed chair's cautious stance on the world's largest
economy helped revive some bets on heftier easing at its next
policy meeting on July 30-31.
The chance of a 50 bps cut rose to 27.6% from 3.3% on
Tuesday, according to CME Group's FedWatch tool.
Minutes from the Fed' last meeting in mid-June, however,
showed some policymakers felt there was not yet a strong case
for easing. The dollar index .DXY against a basket of six major
currencies stood little changed at 97.001 after falling 0.4%
overnight, when it pulled back from a three-week peak of 97.588
in the wake of Powell's comments.
The greenback was down 0.35% at 108.080 yen JPY= , forced
off a six-week high of 108.990 scaled the previous day.
The euro EUR= nudged up 0.1% to $1.1263 after gaining 0.4%
on Wednesday.
The Australian dollar AUD=D4 was steady at $0.6962
following an overnight rise of 0.5% against the broadly weaker
dollar. The surge helped the Aussie pull away from a 2-1/2-week
trough of $0.6910.
The 10-year U.S. Treasury yield US10YT=RR was at 2.038%
after dropping on Wednesday from a three-week high of 2.113%
following the Fed chair's congressional testimony.
In commodities, U.S. crude oil futures CLc1 extended the
previous day's large gains to touch $60.67 per barrel, their
highest since May 23.
The contract had surged 4.5% on Wednesday after U.S. crude
inventories shrank and as major producers cut nearly a third of
offshore Gulf of Mexico production ahead of an expected storm.
O/R
Brent crude LCOc1 brushed a six-week high of $67.15 per
barrel and last traded at $66.91.
Spot gold XAU= rose to $1,426 an ounce, its highest since
July 3 as reinforced expectations for a Fed rate cut boosted the
non-yielding precious metal. GOL/

(Editing by Kim Coghill)