By Shinichi Saoshiro
TOKYO (Reuters) - Asian stocks rose early on Wednesday as Wall Street set record highs overnight after Federal Reserve Chair Janet Yellen spoke in support of an interest rate hike next month, while the dollar hovered near three-week highs.
Yellen said on Tuesday that the Fed will probably need to raise interest rates at an upcoming meeting in March, and that delaying rate increases could leave the Fed's policymaking committee behind the curve.
Yellen's comments boosted U.S. bank stocks, helping push Wall Street indexes to record highs overnight.
The rise in U.S. stocks nudged MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> to a 19-month high. The index was up 0.3 percent early on Wednesday.
"Fundamentally, the U.S. banks are simply being used as a vehicle to express reflation and 'Trumponomics'," wrote Chris Weston, chief market strategist at IG in Melbourne.
"Although last night really belonged to Janet Yellen whose prepared comments that waiting too long to tighten would be 'unwise' and a further review its policy stance will take place at its upcoming meetings."
Japan's Nikkei <.N225> added 1 percent and Australian stocks <.AXJO> rose 0.9 percent.
In currencies, the dollar index against a basket of major currencies stood at 101.230 <.DXY>, near a three-week high of 101.380 scaled overnight as investors reassessed the possibility of the Fed hiking interest three times this year following Yellen's comments.
U.S. interest rate futures
The greenback was a shade higher at 114.370 yen
The dollar was supported as U.S. Treasury yields rose on the Fed Chair's comments, with the benchmark 10-year note yield
The stronger dollar, which puts non-U.S. buyers of dollar-denominated commodities at a disadvantage, weighed on crude oil prices.
(Reporting by Shinichi Saoshiro; Editng by Eric Meijer)