TOKYO (REUTERS) - Asian stocks slipped in volatile trade on Wednesday (June 22), failing to extend Wall Street's rally as persistent worries about interest rates and inflation remained a key focus for investors, while the Japanese yen hit a fresh 24-year low against the US dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1 per cent, but was still up 1.39 per cent on the more than five-week low it hit on Monday. Tokyo's Nikkei gave up early gains and was flat.

Singapore's Straits Times Index was down 0.56 per cent at 11.11am local time, a day after the Government announced a $1.5 billion package to blunt the impact of rising costs on businesses and households.

Investors are continuing to assess how worried they need to be about central banks pushing the world economy into recession as they attempt to curtail red hot inflation with interest rate increases.

The main US share benchmarks rose 2 per cent overnight on the possibility the economic outlook might not be as dire as thought during trade last week when the S&P 500 logged its biggest weekly percentage decline since March 2020.

"I think that this recent post-holiday bear market rally is a reflection of the uncertainty that investors have regarding whether we have seen the peak of inflation and Fed hawkishness or not - I think we're close," said Invesco global market strategist for Asia-Pacific David Chao.

"Even though I suspect global equity markets could end higher at the end of the year than where we are today, it's conceivable to expect continued market volatility until it becomes clear that the Fed is not going to force the US economy into contraction in order to tamp down persistent levels of inflation."

In a sign Wall Street may not be able to repeat Tuesday's rally, S&P 500 and Nasdaq futures both fell more than 0.5 per cent.

Chinese blue chips lost 0.4 per cent, Hong Kong's Hang Seng Index fell 0.9 per cent and Korea's KOSPI was down 1.78 per cent.

US Federal Reserve chair Jerome Powell is due to start his testimony to Congress today, with investors looking for further clues about whether another 75 basis point rate hike is on the cards at the Fed's July meeting.

Most other global central banks are in a similar situation, apart from the Bank of Japan, which last week pledged to maintain its policy of ultra-low interest rates.

The gap between low interest rates in Japan and rising US rates has been weighing on the yen, which hit a new 24-year low of 136.71 per dollar in early trading, before drifting firmer to 136.18.

Minutes from the Bank of Japan's April policy meeting released on Wednesday showed the central bank's concerns over the impact that the plummeting currency could have on the country's business environment.

Other currency moves were more muted on Wednesday, with the dollar index, which tracks the greenback against six peers, a touch firmer at 104.6.

The yield on benchmark US 10-year Treasuries was fairly steady at 3.2674.

Oil prices fell, with US President Joe Biden expected on Wednesday to call for a temporary suspension of the 18.4 cents a gallon federal tax on gasoline, a source briefed on the plan told Reuters.

Brent dropped 2.1 per cent to US$112.27 a barrel, while US crude fell 2.21 per cent to US$108.09.

Spot gold dropped 0.21 per cent, trading at US$1828.70 an ounce.

Bitcoin continued to trade around US$20,640 after falling as low as US$17,592 last week.