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EghtesadOnline: Asia shares inched ahead while oil fell for a second session on Tuesday, as investors awaited guidance on whether the Federal Reserve will raise U.S. interest rates this year.

According to Reuters, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.3 percent in slow trade. South Korea .KS11, Australia and Shanghai .SSEC all gained.

Japan's Nikkei .N225 went the other way and eased 0.2 percent as the yen held firm on the dollar.

A survey of Japanese manufacturing activity showed signs of steadying in August as output rose for the first time in six months, but had little impact on stocks.

The IHS Markit/Nikkei Japan Flash PMI rose to 49.6 in August from a final 49.3 in July. More flash surveys are due from Europe and the United States later in the day. ECONG7

The whole world seems to have hushed ahead of comments from Fed Chair Janet Yellen at the central bank's annual meeting in Jackson Hole on Friday. Investors still doubt the stars will align for a hike anytime soon, so a hawkish tone from Yellen would challenge that equanimity.

"Ever so slowly, the market does seem to be reluctantly acknowledging the chorus of senior Fed speakers who have suggested recently that a 2016 rate hike is still quite probable and September is 'live'," wrote analysts at ANZ in a note.

"But in reality, the response has been very muted."

Indeed, U.S. Treasuries actually rallied on Monday, with 10-year yields US10YT=RR at 1.54 percent after falling 4 basis points overnight.

Fed fund futures <0#FF:> imply around a 24 percent chance of an easing in September, rising to around 50 percent by December. A quarter-point hike is not fully priced until September 2017.

OIL GIVES GROUND

In commodity markets, oil remained under pressure after shedding 3 percent on Monday.

Prices retreated from two-month highs on worries about burgeoning Chinese fuel exports, more Iraqi and Nigerian crude shipments and a rising U.S. oil rig count.

Brent crude LCOc1 lost 53 cents to $48.63 a barrel. It hit a two-month high of $51.22 on Friday. U.S. crude futures CLc1 fell 66 cents to $46.75, after the September contract expired on Monday at $47.05.

On Wall Street, the Dow .DJI had ended Monday down 0.12 percent, while the S&P 500.SPX lost 0.06 percent and the Nasdaq .IXIC added 0.12 percent.

Biotech stocks received a boost from Pfizer's (PFE.N) $14 billion acquisition of cancer drug maker Medivation (MDVN.O), which jumped nearly 20 percent.

Of the 479 companies in the S&P 500 that have reported earnings, 71 percent have topped expectations, according to Thomson Reuters data. Earnings are currently showing a decline of 2.3 percent for the quarter.

In forex markets, the dollar slipped a touch to 94.466 against a basket of currencies .DXY. The index fell about 1.3 percent last week on what traders perceived as mixed signals from Fed officials.

The dollar drifted as low as 100.03 yen JPY= in early trade but found enough support to clamber back to 100.27. The euro was a shade firmer at $1.1332 EUR=.

The New Zealand dollar blipped higher after the country's central bank forecast another 35 basis points in possible rate cuts, less than many investors had wagered on.

The kiwi dollar NZD=D4 rose around a third of a cent to $0.7310 in reaction.

oil prices Federal Reserve Asia stocks U.S. interest rates Asia shares