By Johann M Cherian

(Reuters) - Asian stocks gained, while the U.S. dollar was under pressure on Wednesday finding little support from a rise in bond yields, as investors fretted about the fiscal outlook of major developed economies and the lack of progress on trade deals.

Oil prices rose more than 1% after a CNN report said that Israel was preparing a strike on Iranian nuclear facilities, raising supply concerns out of the key Middle East producing region and bringing geopolitical concerns back into focus. [O/R]

Investor sentiment has been fragile since Moody's last week downgraded U.S. credit rating, stoking worries about the country's $36 trillion debt pile, with U.S. President Donald Trump pushing for tax cuts that could worsen the debt load by $3 trillion to $5 trillion.

There are also concerns about a lack of progress on U.S. trade talks with foes and allies pressing Washington to ease or eliminate its tariffs.

U.S. stock futures indicated a lower open on Wall Street, while European futures pointed to a muted open.

Treasury yields have stayed elevated, with the yield on 30-year Treasury bonds hitting 5% in Asian hours. That brought no respite to the dollar as investors flocked to safe haven currencies including the yen and the Swiss franc.

"People are looking at the idea of moving capital out of the U.S. and it's certainly not a mass exodus, but people are looking at the opportunities in some of these other markets again," said Chris Weston, head of research at Pepperstone.

Investors sought those opportunities in Asia, with MSCI's broadest index of the region outside Japan up 1% at a seven-month high.

In currencies, dollar selling accelerated in Asia, driving the yen, Swiss franc and the euro to their strongest levels in two weeks.

The pound touched a three-week high and last bought $1.3443. British inflation jumped to a higher-than-expected annual rate of 3.5% in April from 2.6% in March.

Markets were also monitoring the Group of Seven finance minister meetings currently underway in Canada for any hints that a weaker dollar could help advance trade negotiations.

Investors in the Japanese bond market remained jittery after a steep selloff in super-long bonds in the previous session.

Yields on longer-dated bonds hovered near record highs on Wednesday, with questions over how the country could fund new fiscal stimulus, with the central bank trying to normalise monetary policy.

Data on Wednesday showed Japanese shipments to the U.S. fell in April even as exports rose for the seventh straight month, highlighting the toll President Donald Trump's tariffs could take on the fragile economic recovery in Japan.

Analysts said any progress on deals between the U.S. and its trade partners could fuel risk appetite, but there are concerns Trump's policies could still damage the global economy.

On Tuesday, U.S. Federal Reserve officials said prices were rising on the back of higher U.S. import tariffs and counselled patience before making any interest rate decisions.

Gold prices rose on Wednesday as the dollar weakened and investors flocked to safe-haven assets. Spot gold was 0.39% at $3,301 per ounce, the highest in more than a week.[GOL/]