* Equity markets fluctuate between gains and losses; Kospi

yoyos

* Brent crude around $85 per barrel after attacks on Strait

of Hormuz shipping

* Yen remains in focus after US-Japan FX intervention and

weak JGB auction

(Updates prices, adds JGB auction)

By Gregor Stuart Hunter

SINGAPORE, Aug 4 (Reuters) - Asian markets were choppy on

Tuesday as investors weighed whether strong U.S. corporate

earnings would boost AI-related stocks in the region, while oil

prices bounced back after attacks on shipping in the Strait of

Hormuz.

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

was down 0.1%, as volatile South Korean shares

swung between gains and losses, last up 1.2%. Japan's

Nikkei 225 nudged 0.2% upwards, while S&P 500 e-mini

futures were 0.3% higher.

"The AI trade is maturing," Societe Generale analysts wrote in

a research report. "Investor focus is increasingly shifting

toward the sustainability of margins beyond 2026," they said,

citing falling earnings expectations for South Korean technology

stocks that have been at the centre of recent volatility.

Overnight, markets took confidence from data showing that U.S.

manufacturing activity increased to the highest level in more

than four years in July, sending the Dow Jones Industrial

Average to a record close.

With almost two-thirds of S&P 500 companies reporting for the

second quarter, 84% have beaten earnings estimates, according to

LSEG data.

Earnings announcements from Big Tech firms show "the AI capex

boom remains intact," Eastspring Investments analysts, including

Chief Investment Officer Vis Nayar, wrote in a note.

Oil prices made limited gains in Asian trading, with Brent crude

up 1.6% at $85.12 a barrel, after falling to a

three-week low on Monday as U.S. President Donald Trump said he

had held off on a fresh attack on Iran as a gesture of goodwill

in peace talks. However, Tehran has denied that any negotiations

are taking place.

Against the yen, the dollar was up 0.3% at 157.62 yen,

rebuilding strength after coordinated intervention by U.S. and

Japanese authorities to prop up the yen last week.

The yen remains about 4% stronger against the greenback compared

with the levels a week ago that prompted official support and

marked the first U.S. intervention in the Japanese foreign

exchange market in 15 years.

But an auction of 10-year Japanese government bonds on Tuesday

also drew weaker demand than the previous sale of sovereign

debt, prompting a fresh bout of jitters. The yield on the notes

jumped 3 basis points to 2.85%.

The yield on the U.S. 10-year Treasury bond was up 1.2 basis

points at 4.694%.

The U.S. dollar index, which measures the greenback's

strength against a basket of six currencies, was trading steady

near the lowest levels of the past two months at 100.01.

Market pricing continues to indicate that September's Federal

Reserve meeting will lead to a lift in interest rates.

Fed funds futures are pricing an implied 65% probability of

a 25-basis-point hike at the U.S. central bank's next two-day

meeting ending on September 16, according to the CME Group's

FedWatch tool.

In cryptocurrencies, bitcoin was flat at $63,776.56 and

ether slipped 0.3% to $1,862.40.