HONG KONG, Aug 8 (Reuters) - Asian stocks rose on Wednesday and the dollar held firm after the U.S. Federal Reserve gave a positive outlook for the world's biggest economy, soothing worries about global credit woes.

The Fed, which left its key interest rate unchanged at 5.25 percent in a widely expected move, said while tightening credit conditions were a risk to the U.S. economy, inflation was still its main worry. [ID:nN07214742]

Those comments knocked back expectations of a cut in U.S. interest rates, helping shore up the dollar, while an interest rate hike in Australia gave the Aussie dollar a boost.

"It looks like the Fed delivered the best possible statement to relieve the market. While touching on the credit issue, it maintained a positive economic outlook," said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities in Korea.

MSCI's measure of Asia Pacific stocks excluding Japan <.MIAPJ0000PUS> put on 1.4 percent by 0225 GMT, rising for a second session from a one-month low plumbed on Monday. It was still down about 8 percent from a record high set on July 24.

By the end of the morning session, Tokyo's Nikkei average <.N225> had risen 0.6 percent. Investors mostly shrugged off a bigger-than-expected fall in the volatile machinery data -- a key gauge of corporate capital spending. [ID:nT12591]

"The Nikkei slipped a bit after the worse-than-expected machinery data, but a rise in the U.S. market helped encourage investors to pick up shares with good earnings results," said Hiroaki Kuramochi, a managing director at Bear Stearns.

Other major markets in the region such as Hong Kong <.HSI>, South Korea <.KS11>, Taiwan <.TWII> and Singapore <.STI> all rose more than 1 percent. Australia's S&P/ASX 200 index <.AXJO> climbed 1.5 percent, unaffected by the widely anticipated tightening by the Reserve Bank of Australian (RBA).

"I think the comments by the Fed and RBA have given a lot of confidence to the market. Both central banks have underlined the fact that the broader economy is doing quite well," said Michael Heffernan, senior client adviser and strategist at Austock Stockbroking.

Among individual stocks, Japanese information services company CSK Holdings (9737.T: Quote, NEWS , Research) jumped nearly 10 percent after posting solid quarterly results, while Australian logistics firm Brambles (BXB.AX: Quote, Profile , Research) gained 8 percent on takeover speculation.

Also in favour, Lenovo (0992.HK: Quote, Profile , Research), the world's third-largest maker of personal computers, added 2.4 percent on news it was in talks to buy European PC maker Packard Bell BV. [ID:nHKG71624]

Financial stocks, which suffered the brunt of a recent selloff on fears of a global credit squeeze, continued their recovery with Macquarie Bank (MBL.AX: Quote, Profile , Research) gaining 4 percent.

DOLLAR FIRM

Diminished expectations of a rate cut by the Fed helped the dollar extended its rise against the yen <JPY=>, which was also dragged down by the weak machinery orders data.

But market players were still cautious about the possibility of a further fallout from the U.S. credit crisis, and were still looking to the performance of stock markets for cues.

The dollar rose 0.1 percent to 118.85 yen after hitting a high of 119.05 yen and the euro climbed about 0.2 percent to 163.50 <EURJPY=R>.

Against the dollar, the euro edged up to $1.3754 <EUR=>, but held near an overnight low of $1.3736 plumbed on electronic trading platform EBS.

The Australian dollar <AUD=> gained 0.2 percent to $0.8567 after the RBA lifted its key overnight cash rate to a decade-high 6.5 percent, saying higher borrowing costs were needed to check inflation. [ID:nSYD93637]

Spot gold <XAU=> hovered above $670 an ounce and oil prices took a breather after a short-lived rebound on news of refinery problems in the United States. London Brent <LCOc1> eased 38 cents to $71.42 after climbing 63 cents on Tuesday.

Weakness in U.S. Treasuries weighed on Japanese government bonds (JGBs), pushing the benchmark 10-year yield <JP10YTN=JPTC> up 2.5 ticks to 1.76 percent.

"We're not seeing an impact from the machinery orders. Investors are looking more at U.S. markets," said Takafumi Yamawaki, a fixed-income strategist at Morgan Stanley in Tokyo.