* Oil slightly off 7-year peak

* Bid for yen, gold and bonds ebbs

* Kiwi jumps on hawkish rate hike

By Tom Westbrook

SINGAPORE, Feb 23 (Reuters) - Asian stocks steadied on Wednesday and demand for safe-havens waned a little as investors regarded Russian troop movements near Ukraine and initial Western sanctions as leaving room to avoid a war, while a rate hike lifted New Zealand's dollar.

Commodity prices remain elevated, however, and traders are still nervous over the situation on Europe's eastern edge.

Overnight oil struck a seven-year high while the S&P 500 index tipped into correction territory, having dropped more than 10% from January's record peak.

S&P 500 futures were up 0.4% in early Asia trade, after U.S. President Joe Biden left the door open to diplomacy as he announced sanctions on two Russian banks and some elites close to President Vladimir Putin.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1%. Japan's Nikkei was closed for the Emperor's birthday holiday.

"The market sees the various sanctions ... as modest and perhaps not as aggressive as feared," said Chris Weston, head of research at brokerage Pepperstone.

"For now, one could assess there is a vibe across markets that Russian troops will hold Donbass, but push no further," he added, referring to the parts of eastern Ukraine that Russia has recognised as independent and has sent troops to reinforce.

The European Union and Britain also announced plans to target banks and Russian elites while Germany halted Russia's Nord Stream 2 gas pipeline, leading to a nearly 11% leap in Europe's benchmark gas price.

Wheat futures had also leapt on Tuesday, posting the sharpest leap in three-and-a-half years and corn futures hit an eight-month high on concern that conflict could disrupt grain supply from the Black Sea export region.

Brent crude futures were last steady at $96.74 a barrel, having eased off Tuesday's top of $99.50. U.S. crude futures sat at $91.92 a barrel.

"In short, investors are worried about a stagflationary shock to Europe and, to a lesser degree, the global economy generally," said Shane Oliver, chief economist at AMP Capital in Sydney.

METALS BID

Jitters around Ukraine have hit investors in tandem with rising interest rates as central banks around the world start moving to head off inflation.

The Reserve Bank of New Zealand announced its third consecutive rate hike on Wednesday, lifting its benchmark cash rate by 25 basis points to 1%, as expected, but surprising investors with a hawkish tone.