Asian stocks firmed on Thursday, lifted by gain in miners on expectations Australia's government would compromise on a controversial mining tax, while the U.S. dollar eased after the Federal Reserve said the economic recovery was faltering.

Australian shares gave up some of its gains although mining shares were still up around 1.5 percent, encouraged by new Prime Minister Julia Gillard's comments seeking negotiations with the miners over the tax.

Japan's Nikkei <.N225> was up 0.6 percent, holding above a key support at its 25-day moving average near 9,800.

It's not as if investor sentiment has worsened dramatically, but gains look limited as there's uncertainty about the outlook for the global economy, said Yutaka Miura, a senior technical analyst at Mizuho Securities.

The MSCI index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.5 percent.

The U.S. dollar was on the backfoot after the Fed reiterated its pledge to keep interest rates low and issued a cautionary note about volatile financial markets in light of Europe's debt woes.

* The dollar index <.DXY> down 0.1 percent at 85.62 after and held near a one-month low around 89.83 yen.

* Global miners BHP Billiton and Rio Tinto around 1.5 percent. Fortescue Metals Group rose 1.4 percent. The benchmark index <.AXJO> was up 0.2 percent after gaining as much as 0.7 percent.

* The euro gained to $1.2345 despite a widening in Greek-German yield spreads.

* Japanese government bond gained on Thursday, with the benchmark 10-year bond yield hitting a seven-year low on buying from cash-rich Japanese banks. The yield on the current 10-year cash bonds fell 2.5 basis points to 1.145 percent, its lowest level in nearly seven years.

* U.S. crude for August fell for a third day and was down 9 cents to $76.26 a barrel at 10:40 p.m. ET.

(Additional reporting by Aiko Hayashi in Tokyo; Editing by Kazunori Takada)