Asian shares rise, Fed view pressures dollar

By Lisa Twaronite

TOKYO (Reuters) - An index of Asian shares rose in early trading on Tuesday, while the U.S. dollar wallowed near recent lows as investors bet that the U.S. Federal Reserve will stay its hand on hiking interest rates in the months ahead.

MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.3 percent in early trade.

Japan's Nikkei stock average <.N225> was down about 0.1 percent shortly after the open, edging away from the previous session's 15-year highs.

Underscoring that the long-term view remains intact but the near-term is unclear, Fed Vice Chair Stanley Fischer, the central bank's second-in-command, said on Monday that the Federal Reserve is "widely expected" to begin raising interest rates this year though the policy path remains uncertain.

Fischer said the stronger dollar and weaker oil prices figure in U.S. policymaking, but said the central bank is "trying to look through those phenomena."

The dollar plunged last week after the Fed cut its inflation outlook and its growth forecast. The market consensus is that the Fed will hold off raising rates until at least September, rendering short-term directional bets difficult to make.

"The dovish remarks from Mr. Fischer raises the risk for a larger correction in the USD, but the long-term outlook remains bullish for the greenback as the central bank remains on course to raise the benchmark interest rate this year," David Song, currency analyst at DailyFX, said in a note.

The dollar was nearly flat on the day at 119.73 yen , well below Friday's session high of 121.20 and levels above 122 yen touched earlier this month.

The euro stood at $1.0945 , well above a 12-year nadir of $1.0457 plumbed last week before the Fed's statement.

The euro got a lift against the dollar on Monday after European Central Bank President Mario Draghi said he expected consumer prices to rise gradually by the end of the year even if they might remain very low or negative in the months ahead.

Some market participants took this as a sign that the ECB might wrap up its bond-buying scheme early, though Draghi said it intended to carry out purchases at least until end-September.

The weaker dollar lent support to dollar-denominated commodities, though some investors took profits on recent rallies. U.S. crude futures edged down about 0.1 percent to $47.39 a barrel after soaring 1.9 percent in the previous session.

Spot gold held its gains from a four-day rally, rising slightly to $1,189.36 an ounce.

(Editing by Eric Meijer)