(Fixes typographical error in headline)
* MSCI Asia-Pacific index down 0.35 pct, Nikkei sheds 0.85pct
* Asia weighed after Wall St suffers worst month in 2 years
* Dollar supported amid prospects of hawkish Fed
By Shinichi Saoshiro
TOKYO, March 1 (Reuters) - Asian stocks skidded on Thursdayafter comments from the Federal Reserve's new chief rekindledfears about the pace of U.S. monetary tightening this year,sending Wall Street tumbling for its worst performance in twoyears and lifting the dollar.
For weeks investors have been on edge, with the recent routin equities cascading through financial markets amid concernshigher interest rates in advanced economies, led by the UnitedStates, could dent world growth.
Fed Chairman Jerome Powell, in his first public appearanceas head of the U.S. central bank, vowed on Tuesday to preventthe economy from overheating while sticking with a plan togradually raise interest rates. was enough to send investors out of stocks, with MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS down 0.35 percent.
Australian stocks .AXJO fell 0.8 percent and Japan'sNikkei .N225 dropped 0.85 percent.
The losses came amid a broad selloff on Wall Street, wherethe Dow .DJI and S&P 500 .SPX capped their worst monthssince January 2016 overnight. .N
The Fed's last round of economic projections in Decemberpointed to three rate increases this year, but Powell'stestimony before the U.S. House of Representatives' FinancialServices Committee, prompted investors to increase bets on fourrate increases in 2018.
The dollar got a lift on Powell's comments. The dollar indexagainst a basket of six major currencies .DXY rose to 90.698overnight, its highest since Jan. 23 and last stood at 90.681.
The index has managed to claw back from a three-year low of88.253 set in mid-February amid fears of a ballooning U.S.budget deficit and lingering worries that Washington couldpursue a weak dollar policy took a toll.
"The comeback by the dollar could negatively impact crudeoil prices and in turn cool inflation expectations. In thatcase, the equity markets could be forced to undergo significantadjustments," said Makoto Noji, senior strategist at SMBC NikkoSecurities in Tokyo.
U.S. crude oil futures CLc1 stood little changed at $61.63per barrel after sliding more than 2 percent overnight.
A stronger greenback tends to weigh on commodities includingcrude, as it makes it more expensive for non-U.S. buyers of thedollar-denominated products.
The euro was steady at $1.2192 EUR= and in close reach ofa 1-1/2-month low of $1.2188 plumbed the previous day. Thecommon currency came under pressure after data on Wednesdayshowed euro zone inflation slowing to a 14-month low andunderscored the European Central Bank's caution in removingmonetary stimulus.
The Australian dollar was flat at $0.7763 AUD=D4 afterdipping to $0.7756, its lowest since late December.
Long-term U.S. Treasury yields US10YT=RR stood littlechanged at 2.864 percent after declining about 3 basis pointsovernight on month-end purchases by investors rebalancing theirportfolios and weaker Wall Street shares. US/ (Editing by Shri Navaratnam)