SINGAPORE, March 26 (Reuters) - Asian equities struggled for traction on Tuesday as mixed messages from U.S. monetary policymakers and a wobble in the Chinese yuan left traders unsettled and tentative with Friday's release of U.S. inflation data hanging over the outlook.

The risk of Japan intervening to prevent further falls in the yen squeezed the dollar, however it rose against the yuan on speculation that China may tolerate a weaker currency.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3%, led by chipmaker gains for South Korea's Kospi. Other markets lacked direction and drifted either side of flat, with sentiment in China and Hong Kong still fragile after Friday's sudden slide in the yuan.

Investors in Hong Kong were waiting on signs of support for the property market and to see whether Friday's unexpected fall in the yuan signalled a policy shift, said Steven Leung, director of institutional sales at broker UOB Kay Hian.

Insurer AIA, down 17% in 10 trading days since the company did not promise new buybacks in its results announcement, highlighted the fragile mood.

Japan's Nikkei was steady as was the yen, which last traded at 151.38 per dollar. S&P 500 futures rose 0.1%. European futures were flat. FTSE futures fell 0.3%.

On Monday, the mixed outlook from Federal Reserve officials threw a few wildcards into the policy outlook while markets wait on the next U.S. inflation indicators due on Good Friday.

Chicago Fed President Austan Goolsbee said he had pencilled in three rate cuts this year, while Fed Governor Lisa Cook urged caution and Atlanta Fed President Raphael Bostic re-iterated Friday remarks trimming his expectations to one cut.

"Comments by FOMC participants suggest to us that four voters – Bostic, Bowman, Mester, and Barkin – see zero, one or two cuts this year," said Standard Chartered strategist Steve Englander.

"We still think (chairman Jerome) Powell has eight votes for easing, but he probably does not want an 8-4 vote on the first cut of the cycle. Rather, he may hope that good inflation outcomes will allow him to swing a couple of votes into the cutting camp in the coming months."


U.S. interest rate futures price about three Fed rate cuts this year and about a three-in-four chance of the first cut in June.

U.S. two-year yields, which track short-term interest rate expectations, rose in New York trade overnight then fell 3.5 basis points in Asia trade to 4.59%.

In foreign exchange, Monday's rhetoric from Japan's top currency diplomat, Masato Kanda, kept the yen steady as traders weigh the risk of Japan buying heavily. Kanda said the yen's recent slide was "strange" and "speculative".

The Bank of Japan (BOJ) lifted interest rates last week but the yen has fallen near to three-decade lows on the dollar.

China's yuan opened steady after a stronger-than-expected fixing of its trading band, but selling pressure soon drove it to the weak side of its 200-day moving average at 7.2184 per dollar.

Markets were unsettled by a sharp drop in the yuan on Friday, after months of tight trading, and some speculate China is loosening its grip on the currency to allow it to fall.

"Whether this reflects a shift in FX policy remains to be seen but accommodative monetary conditions are necessary in the face of growth headwinds," said BofA Securities' strategist Adarsh Sinha.

"If (yuan) depreciation sustains and coincides with a weaker credit impulse, Asia FX is vulnerable."

Later on Tuesday, U.S. manufacturing, services and consumer confidence figures are due. U.S. core PCE data is due on Friday.

Gold and oil prices were broadly steady in commodities trade, with spot gold at $2,172 an ounce and Brent crude futures up 7 cents a barrel to $86.82.

Bitcoin hovered just above $70,000 after rising sharply on Monday.

(Editing by Lincoln Feast.)