TOKYO, March 27 (Reuters) - Japanese stocks advanced

amid a weakening yen on Wednesday while Chinese stocks slipped,

with overall regional trading lacking strong direction in a

holiday-shortened week that ends with a key reading of U.S.

inflation.

Japan's Nikkei gained 0.93% to 40,775.62 as of 0155

GMT, heading back towards the all-time high of 41,087.75 reached

last Friday.

The yen edged toward the 152-per-dollar mark that some see

as the red zone for central bank intervention, after Japanese

authorities stepped in at 151.94 in October of 2022. The yen was

last about 0.1% weaker at 151.73.

The yen has been sliding despite the Bank of Japan's first

interest rate hike for 17 years last week.

BOJ board member Naoki Tamura reinforced the dovish outlook

regarding further tightening on Wednesday, saying the central

bank should "move slowly but steadily toward policy

normalisation".

Hong Kong's Hang Seng and mainland Chinese blue chips

each lost about 0.4%, reversing gains from the

previous session.

Overall, MSCI's broadest index of Asia-Pacific shares

advanced 0.11%, but that flipped to a 0.22%

decline if Japanese shares were removed.

"It's choppy, directionless trading, and there's a good

reason for that: we've hit that time of the quarter when

rebalancing flows are impacting the market," said Tony Sycamore,

a strategist at IG.

Another reason is that two key events - the release of the

U.S. Federal Reserve's favoured inflation indicator and public

comments from Fed Chair Jerome Powell - come on Friday, when

most markets are closed for a holiday, he added.

Inflation data "have not been doing what's expected", and in

the event of a hot reading, "the bumpy road that the Fed has

been talking about suddenly starts to look more like a mountain

trek", Sycamore said.

The U.S. dollar index, which measures the currency

against six major peers, including the yen, was 0.1% higher at

104.39, taking it just below Friday's five-week high of 104.49.

The euro eased 0.07% to $1.08245. Sterling

fell 0.11% to $1.2615.

Traders are trying to gauge which of the big central banks

will be first to cut rates this year.

Meanwhile, Sweden's Riksbank decides policy later in the

day, with a hold widely expected, but markets are looking at

hints for a cut by June.

U.S. long-term Treasury note yields were stable

at 4.2356%.

Gold eased 0.1% to around $2,176 as it continued to

search for a short-term floor following its surge to a record

$2,222.39 on Thursday.

Cryptocurrency bitcoin added 0.7% to $70,303.

Crude oil fell for a second day after a report that crude

stockpiles surged in the U.S., the world's biggest oil user, and

on signs major producers are unlikely to change their output

policy at a technical meeting next week.

Brent crude futures for May dropped 69 cents, or

0.8%, to $85.56 a barrel. The May contract is set to expire on

Thursday and the more actively traded June contract

declined 60 cents, or 0.7%, to $85.03.

U.S. West Texas Intermediate (WTI) crude futures for

May delivery fell 55 cents, or 0.7%, to $81.07.