SINGAPORE (Reuters) - Asian stocks rose on Wednesday as comments from Fed Chair Jerome Powell reinforced expectations that U.S. rate cuts were not far off, while the yen remained pinned near levels last seen in 1986, keeping traders wary of Japanese intervention.

MSCI's broadest index of Asia-Pacific shares outside Japan was 0.26% higher, while Japan's Nikkei rose 0.49%, stalking the record high touched in March.

The U.S. is back on a "disinflationary path", Powell said on Tuesday, although he cautioned that policymakers need more data before they can consider cutting interest rates.

Powell's comments sent U.S Treasury yields 4.3 basis points lower overnight, with the yield on the 10-year note steady at 4.433% in Asian hours on Wednesday, keeping the dollar subdued. Investors were also weighing data showing a tight U.S. labour market.

Michael Brown, senior research strategist at Pepperstone, said Powell's remarks sounded, at the margin, just a touch more dovish than those made as of late.

"Commentary of this ilk appears to further open the door to a September rate cut, especially with Powell also flagging the risk associated with leaving it too late to deliver the first rate reduction."

Traders are currently pricing in a 69% chance of the Fed cutting rates in September and as many as two rate cuts this year, a far cry from the over 150 basis points of easing expected at the start of the year.

Chinese stocks fell in early trading, with the blue-chip CSI 300 index down 0.27%. Hong Kong's Hang Seng was 0.3% higher.

Data showed China's services activity expanded at the slowest pace in eight months and confidence hit a four-year low in June, dragged by slower growth in new orders, suggesting the need for more economic stimulus.

RATE CUT HOPES

The prospect of a U.S. rate cut coming soon has kept a lid on the dollar's ascent, with the dollar index, which measures the U.S. unit against six rivals, steady at 105.71.

The yen was slightly weaker at 161.63 per dollar, close to the 38-year low of 161.745 it touched on Tuesday.

The yen has dropped over 12% against the greenback this year, hurt by the wide gap between the interest rates in the U.S. and Japan.

Traders have been on the lookout for signs of Japanese authorities intervening in the currency market to prop up the frail yen, with some analysts suggesting that the line in the sand might be further away than current levels.

"We suspect interest on the pair has subsided as intervention threat looms around the 164-165 level," said Alex Loo, macro strategist at TD Securities in Singapore.

Meanwhile, the euro last fetched $1.07455, just below the two-week high it hit on Monday as opponents of France's National Rally (RN) stepped up their bid to block the far-right party from power, with more candidates agreeing to pull out of the run-off election to avoid splitting the anti-RN vote.

Data on Tuesday also showed euro zone inflation eased last month but a crucial services component remained stubbornly high, likely fuelling concern among some policymakers that domestic price pressures could stay at elevated levels.

Sterling was little changed at $1.2685 ahead of the UK general election on Thursday where the opposition Labour party is widely expected to win a landslide victory.

In commodities, oil prices were higher as U.S. industry data boosted hopes of solid fuel demand during the summer driving season in the top oil consuming nation. [O/R]

Brent crude oil futures rising 0.44% to $86.62 a barrel, while U.S. West Texas Intermediate crude futures were 0.41% higher at $83.15 per barrel.

(Reporting by Ankur Banerjee and Sameer Manekar in Singapore; Editing by Muralikumar Anantharaman)