By Ankur Banerjee

SINGAPORE (Reuters) - Asian stocks were perched at their highest in more than two months on Tuesday as expectations for more U.S. rate cuts kept risk sentiment aloft, while investors awaited a policy decision from Australia's central bank.

In an eagerly awaited press conference, China's top financial regulators including the central bank unveiled a slew of measures to aid the stuttering economy, including moves to reduce mortgage rates for existing homes.

The Reserve Bank of Australia is widely expected to stand pat on rates but the Federal Reserve's 50 basis point cut last week has raised some expectations Australia could follow the Fed.

"The RBA is likely to stick to its hawkish stance for now, aiming to keep inflation expectations anchored," said Charu Chanana, head of currency strategy at Saxo.

"A potential pivot may come only at the November 5 meeting depending on further labour market data and the Q3 CPI report."

That has left the markets steady, with MSCI's broadest index of Asia-Pacific shares outside Japan 0.04% higher at 586.31, levels last seen on July 15.

Japan's Nikkei was the biggest mover in early trading, soaring 1.69% to a near three-week high ahead of an eagerly awaited speech by Bank of Japan Governor Kazuo Ueda.

China's central bank on Monday lowered its 14-day repo rate by 10 basis points, days after disappointing markets by not cutting longer-term rates.

Overnight, the U.S. stocks closed modestly higher as traders digested the Fed's big move last week, with policymakers explaining the need for the 50 bp cut.

"I am comfortable with a starting move like this - the 50 basis point cut in the federal funds rate announced last Wednesday - as a demarcation that we are back to thinking more about both sides of the mandate," Chicago Fed President Austan Goolsbee said. "If we want a soft landing, we can't be behind the curve."

Markets are currently evenly split on whether the U.S. central bank will go for another 50 bps cut or a 25 bps cut in November, CME Fedwatch tool showed. They are pricing in 76 bps of easing this year.

Brown Brothers Harriman Senior Markets Strategist Elias Haddad said the market is overestimating the Fed's capacity to ease. "However, it will likely take strong U.S. jobs data to trigger a material upward reassessment in Fed funds rate expectations."

The next non-farm payrolls report is due Oct. 4 and until then, Haddad said a more dovish Fed and a strong U.S. economy offer financial market risk sentiment support and can further undermine the dollar mostly against growth-sensitive currencies.

The dollar index, which measures the U.S. currency against six rivals, was at 100.95, not far from the one-year low of 100.21 touched last week. The yen was little changed at 143.65 per dollar. [FRX/]

The euro was steady at $1.11055 in early Asian hours, having dropped about 0.5% on Monday as business activity reports for the euro zone economy disappointed, raising expectations for more interest rate cuts by the European Central Bank this year.

The Australian dollar was 0.15% lower at $0.6828 but hovering close to the nine month high it touched on Monday.

In commodities, oil prices were slightly higher in early trading, with Brent crude futures up 0.26% at $74.09 a barrel, while U.S. crude futures 0.3% higher at $70.6. Oil prices had slid on Monday on demand worries as well as weak economic data from Europe.

(Editing by Sam Holmes)