By Stella Qiu

SYDNEY, Aug 14 (Reuters) -Asian shares rose and the dollar nursed losses on Wednesday after soft U.S. producer prices data stirred hopes that consumer price inflation would be benign, sending bond yields lower.

The kiwi dollar NZD=D3 slumped 0.7% after the Reserve Bank of New Zealand cut interest rates by 25 basis points to 5.25% and projected more easing to come.

Adding to the busy news flow in the Asia morning were headlines that Japanese Prime Minister Fumio Kishida would step down as ruling party leader in September, ending a three-year term marked by rising prices and marred by political scandals.

The yen JPY=EBS strengthened slightly to 146.53 per dollar and the benchmark Nikkei .N225 gave up gains to be flat after news of Kishida's resignation broke. Still, the Japanese stock index remains well above the lows hit after last week's massive selloff.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 0.5%. Hong Kong's Hang Seng .HSI, however, slipped 0.4%, and mainland blue chips .CSI300 lost 0.6%.

U.S. equity futures were flat after a strong rebound on Wall Street overnight as data showed U.S. producer prices rose by less than expected in July, suggesting inflation continued to moderate.

That led markets to nudge up the chance of an outsized half-point rate cut from the Federal Reserve in September to 53% from 50% a day earlier, according to the CME FedWatch Tool.

Goldman Sachs lowered their expectations for the core Personal Consumption Expenditures (PCE) price index, the Fed's preferred gauge of inflation, to be up 0.14% in July, moderating from the previous forecast of 0.17%.

Investors now await all-important consumer price figures for July later in the day where economists look for rises of 0.2% in both the headline and core, with the annual core slowing a tick to 3.2%.

"Risk will find buyers if additional implied rate cuts are driven by a reduced inflation dynamic," said Chris Weston, head of research at Pepperstone.

"However, the opposite is true if any additional rate cuts are driven by weaker growth or poor labour market readings – this week's U.S. retail sales report could therefore be influential on that thesis."

U.S. bonds saw solid buying overnight with two-year yields US2YT=RR at 3.4142%, having fallen seven basis points in the offshore session.

Ten-year Treasury yields US10YT=RR held at 3.3341% after a drop of 5 bps overnight.

The U.S. dollar was dragged lower by falling bond yields. It held at 102.62 =USD against its major peers, having fallen 0.5% overnight. FRX/

The euro EUR=EBS jumped 0.6% overnight and was last at $1.0996, nearing a major resistance level of $1.1.

In commodities, crude oil recovered some of the previous day's losses as estimates showed shrinking U.S. crude and gasoline inventories. They had been on a winning streak on concerns about an imminent attack from Iran on Israel. O/R

Brent crude futures LCOc1 rose 0.6% to $81.19 a barrel, while U.S. West Texas Intermediate crude CLc1 also gained 0.7% to $78.91.

Gold prices were 0.1% higher at $2,468.78 an ounce. XAU=

Reporting by Stella Qiu; Editing by Sam Holmes

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