*

Asia shares upbeat; eyes on earnings from tech giants

*

Microsoft ( MSFT ), Alphabet, Meta report after the bell

*

25bp Fed cut baked in, focus on end of QT

*

Yen strengthens after Bessent urges Tokyo to give BOJ

scope to

raise rates

By Rae Wee

SINGAPORE, Oct 29 (Reuters) - Asian shares got a lift

from Wall Street on Wednesday thanks to a fresh wave of optimism

over artificial intelligence, as investors braced for a busy day

headlined by the Federal Reserve's decision and earnings from

technology heavyweights.

The prospect of lower U.S. rates this week supported bonds,

while the dollar sustained losses as investors bet Wednesday's

expected Fed cut would not be the last for the year.

Overnight, Wall Street closed at record highs after upbeat

news from Nvidia ( NVDA ) and Microsoft ( MSFT ), with the

former announcing $500 billion in bookings for its AI chips and

that it would build seven supercomputers for the U.S. Department

of Energy.

Microsoft ( MSFT ) meanwhile reached a deal allowing OpenAI to

restructure into a public benefit corporation while giving the

software giant a stake of 27% in the ChatGPT maker.

That helped propel stocks in Asia higher, with MSCI's

broadest index of Asia-Pacific shares outside Japan

rising 0.16% while Japan's Nikkei jumped

more than 1% to hit another record.

South Korea's Kospi similarly scaled an all-time

high, helped by strong earnings and a bullish outlook from SK

Hynix, an Nvidia ( NVDA ) supplier.

The "Magnificent Seven" tech titans Microsoft ( MSFT ),

Alphabet and Meta are due to report earnings

later on Wednesday, where there are lofty expectations for them

to deliver strong results that would justify stretched

valuations.

"Expectations are sky-high, and the bar for disappointment

is high too," said Charu Chanana, chief investment strategist at

Saxo.

"Investors want to see not just solid numbers but evidence

of sustained AI monetisation and broadening demand beyond the

initial boom. That's where the market will judge if this AI boom

is becoming a bubble or not."

Nasdaq futures were up 0.06% while S&P 500 futures

were little changed. EUROSTOXX 50 futures fell

0.14%.

BETTING ON A DOVISH FED

Also key for investors later in the day will be a highly

anticipated rate decision from the Fed, where a 25-basis-point

cut is almost fully priced in.

Alongside the rate move, markets will be watching whether

the central bank could halt its long-running effort to shrink

its balance sheet, known as quantitative tightening (QT).

"The end of QT, if announced, would be interpreted as a

dovish shift, especially if it comes with hints of maintaining

balance-sheet stability," said Saxo's Chanana.

The two-year Treasury yield held at 3.4904% while

the benchmark 10-year yield stood at 3.9814%, as

traders awaited further validation from the Fed on market

pricing for a December easing as well.

The Fed cut expectations in turn left the dollar weak on

Wednesday, with the euro and sterling firming at

$1.1652 and $1.3272, respectively.

The Aussie dollar rose 0.17% to $0.6598, after data

showed domestic inflation rose by the most in over two years in

the September quarter. A shockingly sharp jump in core inflation

seemed to rule out a near-term interest rate cut from the

Reserve Bank of Australia.

In Japan, the yen strengthened 0.3% to 151.66 per

dollar, after U.S. Treasury Secretary Scott Bessent escalated

his warning to Tokyo against keeping the yen too weak through

prolonged low borrowing costs.

The Bank of Japan (BOJ) announces its policy decision on

Thursday, where expectations are for rates to be kept steady.

"We expect the BOJ to adopt a moderately hawkish hold,

signalling its intention to normalize policy in the coming

months and laying the groundwork for a possible rate hike,

likely in December or potentially January," said Gregor Hirt,

global CIO for multi asset at Allianz Global Investors.

"Governor (Kazuo) Ueda may provide some moderate push-back

to mitigate further currency weakening in the absence of

immediate policy action."

Elsewhere, oil prices rose, snapping three straight days of

declines as investors considered the impact of U.S. sanctions

against Russia's two biggest oil companies on global supply,

along with a potential OPEC+ plan to raise output.

Brent crude futures were up 0.28% to $64.58 a

barrel, while U.S. crude rose 0.18% to $60.26 per barrel.

The safe-haven gold traded just shy of $4,000 an

ounce, with a pick-up in risk appetite denting demand for the

asset and after its recent sharp fall squeezed leveraged money

out of a very crowded trade.