GLOBAL MARKETS-Asian shares catch Wall Street's Fed cheer; dollar remains weak

* Powell: Fed will react "as appropriate" to trade war risks
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Wall St stocks jump; 10yr Treasury yield off 21-mth low
* Dollar remains under pressure, hovers near 7-week low

By Tomo Uetake
Tokyo, June 5 (Reuters) - Asian shares tracked the Wall
Street rally on Wednesday after U.S. central bank comments
pointed to the increasing prospects of an interest rate cut,
boosting investor sentiment and pushing the dollar lower.
The rebound in stock prices also prompted U.S. bond yields
to step up from their recent lows, with the 10-year yield off
its 21-month low hit earlier in the week.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged up 0.4%, while Japan's Nikkei average
.N225 climbed 1.9%.
Supporting the market cheer, Federal Reserve Chairman Powell
on Tuesday dropped his standard reference to the central bank
being "patient" in its approach to any rate decision, instead
saying the Fed would respond "as appropriate" to the risks posed
by a global trade war and other recent developments. The comments were interpreted by investors as a clear nod to
a policy easing.
"Powell gave the markets a reason to rally but I think it's
a short-covering bounce, rather than a trend reversal. It's just
the markets have priced in much of the news to come," said Yasuo
Sakuma, chief investment officer at Libra Investments.
On Wall Street, the Dow Jones Industrial Average .DJI , the
S&P 500 .SPX and the Nasdaq Composite .IXIC clocked their
biggest one-day gains in five months. .N
Uncertainties over how, or if, the United States will settle
its trade conflict with its key trade partners, notably China,
has kept many investors on edge.
U.S. Treasury Secretary Steven Mnuchin meets with People's
Bank of China Governor Yi Gang at the G20 finance leaders
meeting this weekend in Japan, a Treasury spokesman said on
Tuesday. Chinese President Xi Jinping said the country's economy is
stable, healthy and well placed to meet all risks and
challenges, according to a transcript published by the Xinhua
news agency. In the foreign exchange market, major currencies were on the
sidelines for now.
The greenback hit a seven week-low of 96.995 against a
basket of six major currencies .DXY overnight. The index was
last quoted at 97.096, little changed on the day. The euro
fetched $1.1258 EUR= , almost steady on the day.
The pound recovered on Tuesday, after suffering its 4th
consecutive week of losses against the euro, but concerns about
a disorderly departure from the European Union meant gains were
minimal, amid promises from U.S. President Donald Trump of a
"phenomenal" post-Brexit trade deal. Sterling was
last quoted at $1.2701 GBP=D4 .
Other major currencies were relatively calm, with the
safe-haven yen still supported but not aggressively so. The
dollar was holding at 108.13 yen JPY= , flat on the day.
In commodity markets, oil prices ended as much as 1% higher
on Tuesday after a global stock market rally pulled Brent crude
from a four-month low touched earlier in the session. O/R
In early Asian trade, U.S. crude CLc1 retreated 0.3% to
$53.33 a barrel and Brent crude LCOc1 futures stood almost
flat at $61.95 per barrel.

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