(Reuters) - Asian stocks rebounded Tuesday and the dollar eased after Federal Reserve Chairman Ben Bernanke said ultra-loose monetary policy was still needed to reduce unemployment even though the U.S. economy has shown signs of improvement.

Wall Street stock rose more than 1 percent on Monday, as Bernanke's comments supported views that easy monetary policy would remain in place for some time and fanned expectations for more asset purchases by the U.S. central bank.

Global equities have been rallying since late last year, partly due to steadily improving U.S. economic data and massive doses of liquidity from central banks, but hit a bump in mid-March after China signaled its growth was moderating.

We are clearly addicted to this highly liquid market, and Bernanke has reassured that it (will) stay up this way, said Kent Engelke, chief economic strategist at Capitol Securities Management.

MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> rose 0.5 percent, led by materials stocks <.MIAPJMT00PUS> that had been hit in recent days by expectations of lower Chinese demand for resources.

Tokyo's Nikkei share average <.N225> rose 1.6 percent, taking its gains for the year-to-date to around 20 percent.

Previous rounds of quantitative easing -- the creation of money to fund asset purchases by the Fed -- have weakened the dollar, and the dollar index <.DXY>, which measures the currency against a basket of major peers, hit a four-week low on Tuesday.

The euro, which was also supported by data from Germany showing business morale rose unexpectedly for a fifth successive month in March, rose to its highest in a month before easing to trade steady on the day around $1.3356.

Oil was also steady, after rising on Bernanke's comments on Monday, with U.S. crude just above $107 a barrel and Brent crude around $125.60.

(Editing by Daniel Magnowski)

Federal reserve China Ben Bernanke Japan