Given the weak ISM report, markets will look to Friday's non-farm payrolls to see if the Fed can risk raising rates this month or later this year
Odds of a hike in US interest rates in September rose to 33 per cent following the comments, from 21 per cent on Thursday
Investors in riskier assets are wary of Yellen hinting at a near-term interest rate hike
Market expectations have increased that Yellen might indicate a clearer timeframe for the next US rate hike
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 per cent in early trade and Nikkei rose 0.4%
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 per cent in early trades
MSCI's index of Asia-Pacific shares outside Japan was down 0.1% but still headed for a 0.4% gain, South Korea's Kospi lost 0.4% and Australian shares dropped 0.2%
With global economy slowing and many countries facing deflationary pressures, investors' focus remained squarely on policy decisions from the world's major central banks