*

Asian stock markets: https://tmsnrt.rs/2zpUAr4

*

Nikkei slips, China holds recent hefty gains

*

Gold rises as dollar slips, oil gives ground

*

Raft of US data to test market wagers on Fed rate cuts

*

Trump tariff policy in doubt after court ruling

(Adds China stocks, PMI)

By Wayne Cole

SYDNEY, Sept 1 (Reuters) - Asian shares were mostly

downbeat on Monday as profit-taking hit some high-flying

Japanese tech groups, though China remained well supported by

optimism over its home-grown AI ventures.

A holiday in the U.S. made for thin trading, with Wall

Street and European share futures managing minor gains after

retreating on Friday.

The dollar and bonds were under some pressure ahead of a

busy week for U.S. data which includes surveys of manufacturing

and services, and a range of labour numbers culminating in the

August payrolls report on Friday.

Median forecasts are for an increase of 75,000, though

estimates range widely from zero to +110,000 due to the

uncertainty caused by July's surprisingly weak report, while the

jobless rate is seen ticking up to 4.3%.

Analysts also cautioned the August report has shown a bias

to undershoot forecasts over the past decade. A result in line

or softer would cement market expectations for the Federal

Reserve to cut rates at its meeting on September 17, which

futures imply is a near 90% probability.

"Although inflation and growth data don't scream out for a

rate cut, at this stage it would likely require a significant

positive employment surprise to stop the Fed from moving

forward, given their concern about the sharp recent deceleration

in job growth," said Michael Feroli, chief U.S. economist at

JPMorgan.

The prospect of lower borrowing costs has underpinned Wall

Street near record highs, and would be timely given September

has been the worst performing month of the year for the S&P 500

over the past 35 years.

S&P 500 futures and Nasdaq futures were up a

slim 0.1%. EUROSTOXX 50 futures firmed 0.1%, while FTSE

futures were flat and DAX futures gained 0.1%.

Japan's Nikkei fell 2.0%, led by a 9% slide in chip

group Advantest ( ADTTF ) which finally ran into selling after

climbing 49% in the past three months. South Korea's market

slipped 0.7%.

CHINA BULLS

MSCI's broadest index of Asia-Pacific shares outside Japan

inched down 0.1%, having hit a four-year high

last week on the back of a bull run in Chinese stocks.

Chinese blue chips edged up 0.2%, having surged

10% over August as abundant liquidity sought capital returns in

an otherwise low-yield environment.

The RatingDog China General Manufacturing PMI, compiled by

S&P Global, rose to 50.5 in August, up from 49.5 in July and

outpacing the official survey.

Hong Kong shares of Alibaba ( BABA ) jumped almost 19% in

the biggest one-day rise since early 2022 on optimism over its

cloud business. There were also reports that DeepSeek had opted

for Huawei chips to train some of its AI models.

U.S. tariff policy remained a concern after a Court of

Appeals ruled many of President Donald Trump's sweeping levies

were illegal, but left them in place until mid-October awaiting

an appeal to the Supreme Court.

The White House has other means to apply sectoral levies but

it puts a question mark over trade agreements already reached or

being negotiated. Talks with Japan have hit a stumbling block

over rice, while negotiations with South Korea have become

bogged down.

"If the Supreme Court upholds the ruling, the Treasury would

still need to return most of the now close to $100 billion in

additional customs duties collected over the past five months,

and there is a danger that other countries would backtrack on

any preliminary agreements," noted Paul Ashworth, chief North

America economist at Capital Economics.

Investors will also be wary of Trump's attacks on the

independence of the Fed this week, with Fed Governor Lisa Cook

set to file fresh arguments against her firing on Tuesday.

A confirmation hearing for Stephen Miran, Trump's pick for

another Fed position, is scheduled for Thursday.

The political pressure for faster rate cuts has been a drag

on the U.S. dollar, which was pinned at 97.791 having

shed 2.2% last month. The euro edged up 0.3% to $1.1710

, while the dollar held at 146.93 yen.

In commodity markets, gold has benefited from the dollar's

decline and the outlook for lower rates to rise 2.2% last week.

The metal added another 0.8% to a four-month top of $3,477 an

ounce.

Oil prices were on the defensive ahead of a planned increase

in output from OPEC+ in coming months.

Brent dropped 0.4% to $67.21 a barrel, while U.S.

crude eased 0.4% to $63.78 per barrel.