Asia stocks dip as Fed-inspired lift peters out

TOKYO (Reuters) - Asian stocks slipped on Friday as Federal Reserve-inspired gains petered out, while the U.S. dollar steadied after rebounding from the shock of a surprisingly dovish U.S. central bank.

Japan's Nikkei shed 0.2 per cent and South Korean and Australian shares posted similar losses.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed after rallying 1.3 percent the previous day.

U.S. shares fell overnight as the dollar's rebound weighed on oil and other commodity prices, sending energy and material sectors lower.

"Crude oil is falling again and if U.S. equities remain unstable amid differing prospects for a Fed rate hike, it will weigh on global equities," said Junichi Ishikawa, market analyst at IG Securities in Tokyo.

The dollar tumbled across the board, risky assets surged and U.S. debt yields sank after the Fed on Wednesday opened the door further for an interest rate hike but signalled a more cautious outlook for U.S. growth, cooling speculation for tightening in June.

The dollar was little changed at 120.79 yen after sinking to the week's low of 119.29 after the Fed's statement.

Helping the greenback was higher U.S. Treasury yields, which on Thursday bounced modestly from multi-week lows hit on the Fed's dovish-sounding statement. The 10-year Treasury note yielded 1.961 per cent after sinking to a five-week trough of 1.899 per cent overnight.

The euro was steady at US$1.0669. The common currency had posted its biggest one-day gain in six years against the dollar and climbed a peak of US$1.1062 after the Fed.

The dollar index was down 0.3 per cent at 99.005 but still well above a low of 96.628 plumbed midweek.

In commodities, U.S. crude oil was little changed at US$43.98 a barrel after taking a knock overnight on the dollar's bounce and Kuwait's stance that OPEC had no option but to keep producing in an oversupplied market.

U.S. crude has dropped to a six-year low of US$42.03 a barrel earlier in the week.