Asian stocks steady after surge, US dollar supported after Fed minutes

TOKYO (Reuters) - Asian stocks steadied on Thursday following Wednesday's surge, while the dollar drew support from minutes of the Federal Reserve's last meeting showing the Fed was still on course to hike interest rates this year.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed after surging 1.8 percent the previous day to a seven-month high.

Japan's Nikkei nudged up 0.2 per cent after hitting a 15-year high the previous day. Australian and South Korean shares stood little changed.

Wall Street only posted modest gains overnight after a volatile session following the Fed minutes, failing to give Asia a strong lead.

Fed officials acknowledged risks from overseas and a weak start to the year at their March meeting but remained confident enough in the strength of the recovery to continue laying the groundwork for an interest rate hike later this year, the minutes showed.

"Federal funds rate futures point towards a rate hike in September or later and this would be positive for the global economy. If the markets had to brace for a June rate hike, that would hit U.S. equities by causing volatility in U.S. debt yields. Global equities, especially those of emerging markets, would be destabilised in turn," said Junichi Ishikawa, market analyst at IG Securities in Tokyo.

In currencies, the dollar was little changed at 120.125 yen after falling to as low as 119.65 overnight. The euro was steady at US$1.0786 after shedding 0.3 per cent the previous day.

The dollar index inched up 0.1 per cent to 98.052.

Crude oil bounced modestly following a big plunge overnight suffered on a huge rise in U.S. stocks and news of record Saudi oil production.

U.S. crude was up 1.1 per cent at US$50.97 a barrel after shedding nearly 7 per cent overnight.

The oil plunge hit commodity currencies such as the Canadian dollar, which fell as far as C$1.2559 per USD from C$1.2388. It was last at C$1.2554.