Asian stocks slipped and the yen rose on Thursday after comments by the head of the U.S. Federal Reserve added to concern about the U.S. economy and left investors uneasy ahead of European bank stress tests.

The results of the European Union examination of banks are due on Friday and are expected to show generally positive results for Greece, Italy and Ireland and a few failures in Portugal and Spain.

However, do not expect risk taking to bounce back for long if at all, given how Europe's fundamental backdrop remains relatively grim, especially with fiscal austerity the norm, U.S. fund managers and analysts said.

Ben Bernanke, the chairman of the Federal Reserve, offered somewhat downbeat comments in Congressional testimony on Wednesday.

Although he said policymakers expected growth to be sustained, he described the outlook as unusually uncertain and didn't offer any specific actions to deal with it.

Federal Reserve Chairman Bernanke's assessment of the U.S. outlook would appear to be similar to driving in the fog -- bleak and uncertain, Standard Chartered analysts said in a note.

The fading fiscal stimulus and inventory restocking cycle will provide less impetus to the recovery going forward than in recent quarters.

* Japan's Nikkei share average <.N225> dropped 0.7 percent, on course for a fifth straight session of losses. Short-term indicators pointed to oversold conditions.

* The MSCI index of Asia Pacific stocks outside Japan <.MIAPJ0000PUS> edged down 0.4 percent, with healthcare and financial stocks the main drags. Some sectors sensitive to business cycles were actually outperforming, suggesting some investors were taking advantage of the uncertainty to scoop up some bargains.

* However, the technology sector was weighed down after South Korea's Hynix Semiconductor, the world's No. 2 memory chip maker, said DRAM prices would fall in the current quarter. Hynix shares <000660.KS> fell 2.8 percent.

* The yen rose across the board, benefiting from the increased risk aversion in financial markets. The U.S. dollar fell 0.3 percent to 86.68 yen, closing in on the 7-1/2-month low hit last week of 86.27.

* U.S. Treasuries were steady after rallying overnight on Bernanke's comments. The 2-year yield was near at a record low of 0.56 percent.

* The collapse in short maturity rates has caused the U.S. yield curve to flatten by 39 basis points so far this year.

* U.S. crude futures stood little changed at $76.59 a barrel after dropping 1.3 percent on Wednesday on Bernanke's comments.

(Editing by Neil Fullick)