By Saikat Chatterjee
HONG KONG (Reuters) - Asian stocks edged higher on Thursday but clung to recent well-worn trading ranges while the dollar held firm against regional currencies ahead of a speech by Federal Reserve Chair Janet Yellen at a global central bankers' meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) edged 0.3 percent higher. It is down 1.6 percent after hitting a one-year high last Tuesday.
Japan's Nikkei (N225) was down 0.3 percent, pressured by losses on Wall Street overnight and investor caution ahead of Yellen's speech in Jackson Hole, Wyoming, on Friday.
Market expectations have increased that Yellen might indicate a clearer timeframe for the next U.S. rate hike after strong housing data this week and hawkish comments by other Fed officials, but many analysts expect her to strike a more neutral stance.
"I don't think the Fed will want to introduce market volatility in the run-up to the G20 meeting and she might strike a more neutral stance on interest rate policy," said Gao Qi, an FX strategist at Bank of Nova Scotia in Singapore, referring to a summit of G20 leaders in China in early September.
A U.S. rate increase last December - the first in almost a decade - unleashed a selloff in global financial markets, sending emerging market currencies and debt falling sharply. A broad index of Asian shares fell more than 10 percent in the two months after the hike.
On Wednesday, futures markets were indicating just an 18 percent chance the Fed would hike rates at its policy meeting next month, and roughly 50 percent odds of a rate increase in December, according to CME Group's FedWatch tool.
Taiwan (TWII) led regional gainers in Asian stock markets with a rise of 0.8 percent thanks to a bounce in financials.
Chinese stocks <.SSEC> <.SZSC> were among the top losers, falling 1 percent to extend their slide this week as investors dumped property shares, while banks came under pressure ahead of earnings reports and a crackdown on riskier lending practices in the financial sector.
"The whole (property) sector had surged more than 20 percent at one point this month, and falls in share prices this morning were purely a result of investors' trading strategy as they want to lock in profits," said Joe Qiao, a Shanghai-based analyst at Xiangcai Securities.
Major U.S. indexes closed down on Wednesday, pulled lower by weakness in the materials and healthcare sectors. The Dow (DJI) lost 0.4 percent and S&P 500 (SPX) fell 0.5 percent. (N) Stock futures (ESc1) were broadly flat in Asian trade.
In currencies, the dollar was a shade firmer at 100.44 yen
The pair has traded in a narrow 99.55-102.83 band this month, and could move back toward the upper end of that range depending on Yellen's remarks, analysts say.
"With 40 hours to go before Janet Yellen's testimony at Jackson Hole, the dollar has finally caught a bid," Kathy Lien, managing director of FX strategy at BK Asset Management, said in a note.
Against a broad trade-weighted basket of its peers (DXY), the dollar was flat on the day at 94.72. Against the euro, it was changing hands at $1.12740
In commodities, crude oil prices remained under pressure after sliding sharply on Wednesday.
U.S. crude (CLc1) was a touch firmer at $46.80 a barrel following a roughly 3 percent drop overnight after an unexpectedly large inventory build in the world's biggest oil consumer renewed worries about oversupply.