(Reuters) - The rupee rose to a three-month high against the dollar on Thursday while bond yields were at their lowest levels since early May as most Asian markets rallied following the U.S. Federal Reserve's comments, helping boost appetite for riskier assets.

Fed Chair Jerome Powell said the Fed's policy rate is now "just below" a level that neither brakes nor boosts a healthy economy.

The comments have prompted speculation that the cycle of U.S. interest rate hikes may be petering out.

The partially convertible rupee was at 70.13 per dollar after touching 70.03 earlier, its strongest level since Aug. 28. It had ended Wednesday at 70.6250.

The benchmark 10-year bond yield was at 7.60 percent by 0340 GMT, down 4 basis points on the day and at its lowest level since May 8.

(Reporting By Swati Bhat; Editing by Gopakumar Warrier)

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