Updates to Asia afternoon

By Ankur Banerjee and Johann M Cherian

SINGAPORE, May 20 (Reuters) - Asian stocks rose on Tuesday while U.S. Treasury yields steadied, allowing a bit of a breathing room for the U.S. dollar as investors took stock of the debt load of the world's biggest economy and awaited trade deals.

The Australian dollar AUD=D3 slipped 0.5% to $0.64255 after the Reserve Bank of Australia lowered interest rates as expected, citing a darker global outlook, though it also remained cautious on further easing.

"With the RBA sounding increasingly uneasy, the path of least resistance for the currency may remain lower," said Charu Chanana, chief investment strategist at Saxo in Singapore.

"Especially if domestic data softens further or global risks flare up again."

In the broader market, investors have taken in stride Moody's downgrade of its rating for U.S. sovereign credit last week due to concerns about that nation's growing $36 trillion debt pile. After a brief selloff in Treasuries on Monday, they stabilised by Asian trading hours on Tuesday.

The 30-year bond US30YT=RR yield was 2.8 basis points lower at 4.912% after hitting an 18-month high of 5.037% in the previous trading session.

European futures STXEc1 pointed to a higher open ahead of a first estimate of consumer confidence for euro zone in May.

"The Moody's downgrade was a temporary shock and rather meaningless in the bigger picture," said Kyle Rodda, senior financial market analyst at Capital.com.

"But then we're not really being fed any kind of fresh new news for investors to buy into... We haven't gotten any new deals coming through."

With little indication of trade deals on the way, markets are struggling for direction, analysts said.

That left the MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS 0.33% higher, hovering near the seven-month high touched last week.

China's blue-chip index .CSI300 climbed 0.6% after the local central bank cut benchmark lending rates for the first time since October.

Hong Kong's Hang Seng Index .HSI rose 1.33%, boosted by healthcare stocks after U.S. drugmaker Pfizer PFE.N said it would license an experimental cancer treatment from Chinese biotech 3SBio Inc 1530.HK.

Also in the spotlight was a strong market debut from Tesla TSLA.O battery supplier CATL 3750.HK, which rose 12.5% at the open. The firm raised $4.6 billion in its Hong Kong listing, the largest in the world this year.

MOODY'S IMPACT

U.S. Federal Reserve officials took on cautiously the ramifications of the Moody's downgrade as they continued to navigate an uncertain economic environment in the wake of erratic U.S. trade action.

While not an imminent issue for the Fed, higher borrowing costs tied to a deteriorating U.S. financial position could make credit generally more expensive and create restraint on economic activity.

"For now, U.S. exceptionalism and corporate resilience are offsetting the risks," said Saxo's Chanana.

"But how long before investors start demanding a higher risk premium, especially with the Fed in wait-and-see mode and trade talks seemingly stalling?"

Markets will be monitoring a U.S. congressional debate over a tax bill later in the day at which Trump is widely expected to be present ahead of a vote on the legislation later this week.

The measure would extend Trump's 2017 tax cuts and potentially add $3 trillion to $5 trillion to national debt over the next decade.

In commodities, oil prices were mixed as investors contended with a potential breakdown in talks between the U.S. and Iran over the latter's nuclear activity and weakened prospects of more Iranian supply entering the market. O/R

Gold prices XAU= slipped 0.3% to $3,218 per ounce as safe haven demand dipped. GOL/

(Reporting by Ankur Banerjee and Johann M. Cherian in Singapore; Editing by Christopher Cushing and Lincoln Feast.)

((ankur.banerjee@thomsonreuters.com;; Mobile - +65 8121 3925;))