* MSCI Asia-Pacific index up 0.75 pct, Nikkei gains 0.9 pct
* Dollar sags broadly following Powell's comments
* Short-term U.S. Treasury yield extends decline after Powell
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh
By Shinichi Saoshiro
TOKYO, Nov 29 (Reuters) - Asian stocks advanced on Thursday, tracking a surge on Wall Street, after the chairman of the U.S. Federal Reserve suggested it may nearing an end to its three-year rate tightening cycle, boosting interest in riskier assets.
The dollar struggled and U.S. Treasury yields dipped after Jerome Powell said on Wednesday that U.S. policy rates were "just below" neutral, less than two months after saying rates were probably "a long way" from that point. broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.8 percent.
The Shanghai Composite Index .SSEC edged up 0.2 percent, Australian stocks .AXJO gained 0.5 percent and Japan's Nikkei .N225 climbed 0.9 percent.
However, gains in Asia were tempered by investor jitters ahead of high-stakes trade talks between U.S. President Donald Trump and his Chinese counterpart Xi Jinping on Saturday on the sidelines of the G20 summit in Argentina.
Economists at ANZ pointed out that policy hawks in the Trump administration who want Washington to take a tough stance against Beijing appear to be in the ascendancy.
"They will want some concessions from China, not least of all on what they perceive is theft of intellectual property and forced technology transfer," wrote the ANZ economists.
"Thus, it would seem the prospect of the Trump-Xi meeting ending without a sustainable resolution to their differences is relatively high."
Analysts believe any signs of a thaw in U.S.-China tensions could trigger a knee-jerk rally but say the move would likely be short lived unless there are substantive compromise from both sides -- most notably if Xi can persuade Trump to postpone a sharp tariff hike on Chinese goods due to take effect Jan. 1.
The Dow .DJI meanwhile rallied 2.5 percent and Nasdaq .IXIC surged nearly 3 percent on Wednesday as Powell's comments eased fears of a faster pace of rate hikes in 2019. .N
"Equities gained as Powell hinted of implementing fewer rate hikes when the economy is still doing well," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.
"The likelihood of slower U.S. monetary tightening caused the dollar to slump against currencies, particularly the euro, which could soon benefit from an ECB rate hike."
The euro was a shade higher at $1.1374 EUR= after advancing 0.7 percent the previous day.
The dollar dipped 0.2 percent to 113.46 yen JPY= after being knocked down from a two-week high above 114.00 scaled overnight.
The Australian dollar, sensitive to shifts in broader risk sentiment, jumped more than 1 percent on Wednesday and last stood little changed at 0.7302 AUD=D4 .
The dollar index against a basket of six major currencies .DXY was effectively flat at 96.805 following an overnight loss of 0.6 percent.
The U.S. two-year Treasury yield US2YT=RR extended a modest decline from the previous day following Powell's comments. The yield was down about 1 basis point at 2.796 percent.
Oil prices clawed back some ground from losses in the previous session, but an increase in U.S. crude inventories and uncertainty in the run to an OPEC meeting next week kept markets under pressure. O/R
U.S. crude futures were up 0.8 percent at $50.66 per barrel CLc1 after sliding 2.5 percent the previous day.
Brent crude LCOc1 rose 0.6 percent to $59.13. It has slumped 21 percent this month, during which it fell to a 13-month trough of $58.41. (Editing by Sam Holmes and Kim Coghill)