GLOBAL MARKETS-Asian shares could gain on dovish Bernanke comments

By Hideyuki Sano

TOKYO (Reuters) - Asian share markets could extend gains on Wednesday as the dollar sagged after Federal Reserve Chairman Ben Bernanke said the Fed is committed to easy policy as long as needed.

Asian currencies could also gain if the Chinese yuan strengthens further after China's central bank said it would gradually exit from regular intervention in the foreign exchange market.

The euro hit a three-week high of $1.3584 and last traded at $1.3560, up 0.2 percent from late U.S. levels, following Bernanke's dovish comments.

Nikkei futures in Chicago rose 0.4 percent thanks to the yen's dip overnight while Australia's stock index futures fell 0.5 percent after a rally in Wall Street shares ran out of steam.

The Standard & Poor's 500 Index declined 0.2 percent on Tuesday, extending its losses so far this week to 0.6 percent.

In contrast, MSCI's index of Asia-Pacific shares outside Japan has risen 1.6 percent so far, thanks to fresh optimism on the Chinese economy after Beijing unveiled ambitious reform plans.

Hong Kong shares, which have gained 2.7 percent so far this week, could break above their January peak to hit 2 1/2-year highs.

"I think Hong Kong shares are best placed at the moment, as they are likely to benefit from easy U.S. monetary policy as well as hopes on reforms in China," said Hirokazu Yuihama, senior strategist at Daiwa Securities.

Zhou Xiaochuan, head of the People's Bank of China, said in a book about the reforms published on Tuesday that China will gradually expand the yuan's foreign exchange trading band to make the currency more flexible and market-driven.

While that does not necessarily mean that China will move the trading band overnight, traders could rush to buy the yuan in advance. The yuan's one-year non-deliverable forward spiked on the news.

"In the past, a rise in the yuan tends to lift Asian currencies. We could see Asian currencies, including the yen, gaining," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp.

The PBOC news also pushed the dollar lower on Tuesday against the euro on the view that China will reduce currency intervention and buy fewer dollars in future.

The euro stood at $1.3565, having hit a three-week high of $1.3584 in early Asian trade.

Oil prices were under pressure after European benchmark Brent futures tumbled 1.4 percent and U.S. crude futures hit 5 1/2-month low on hopes talks between world powers and Iran could lead to an easing of sanctions against the oil producer.