*

Global stocks look past US shutdown, focus on rate cuts

*

No jobs report on Friday, investors take cues from

elsewhere

*

Gold eases slightly from record highs

*

Yen on pace for strongest week vs dollar since May

(Updates to Asia afternoon)

By Ankur Banerjee

SINGAPORE, Oct 3 (Reuters) - Asian stocks were set for

solid weekly gains on Friday as rising odds of the Federal

Reserve cutting rates in the near-term helped cushion jitters

around a U.S. government shutdown that have pushed gold to

record highs and weighed on the dollar.

Investors have mostly shrugged off the shutdown, the 15th

since 1981, even as it resulted in the suspension of scientific

research, financial oversight and delayed crucial economic data,

including the jobs report on Friday.

The lack of market reaction is partly because historically

shutdowns have had limited impact on economic growth and market

performance.

MSCI's index of Asia-Pacific shares was up

0.3%, hitting a record high for second straight session. The

index was set for a 2.3% gain for the week and has risen about

23% so far this year. With China and parts of Asia closed for a

long holiday, volumes are likely to be thin in the region.

European futures pointed to a higher open ahead of

a flurry of manufacturing data from across the region. The

pan-European STOXX 600 closed at a record high on

Wednesday.

Weiheng Chen, global investment strategist at J.P. Morgan

Private Bank, said investors appear willing to give Washington

time to resolve its disagreements, though a prolonged shutdown

may start to move markets.

"For now, investors remain more focused on the potential

impacts of the Fed's rate-cutting cycle, trade and immigration

policy, economic data, and corporate earnings," Chen said.

Japan's Nikkei jumped 1.5%, not far from the record

high it touched last month ahead of the crucial weekend vote

that will determine the next prime minister and set the tone for

fiscal and monetary policy outlook.

Asian markets were taking cues from Wall Street, where all

three major indexes closed at record highs buoyed by technology

stocks as investor enthusiasm for all things AI remains

unchallenged. Taiwan's benchmark index also hit a record

high and was last up over 1%.

NO OFFICIAL DATA

With no government reports on the labour market to take cues

from, investors have turned to alternative data from public and

private sources and so far they point to a sluggish U.S. labour

market.

Blerina Uruci, chief U.S. economist at T. Rowe Price, said

the potential delay of critical economic data is a problem for a

data-dependent Fed, leaving the central bank reliant on less

comprehensive indicators like ADP and jobless claims.

Still, markets are becoming more confident of the Fed

sticking to its rate cutting path and are almost fully pricing

in a 25 basis point rate cut in October. Traders are pricing in

114 bps of easing by the end of 2026.

That has left the U.S. dollar under pressure. The dollar

index, which measures the U.S. currency against six other

units, was steady on the day but on course for a 0.35% weekly

decline, the biggest drop since August.

The Japanese yen has been the biggest beneficiary

of the dollar weakness this week and is set to register a 1.2%

gain, its biggest weekly gain since mid-May.

It weakened 0.3% to 147.74 per U.S. dollar on Friday after

comments from Bank of Japan Governor Kazuo Ueda left markets

guessing on when the central bank will next hike interest rates.

In commodities, gold eased 0.3% $3,845.15 an ounce,

but remained near the record high it touched on Thursday. The

yellow metal is on course for an over 2% weekly gain, its

seventh straight week of gains.

Gold, viewed as a safe-haven asset during times of

uncertainty, thrives in a low-interest-rate environment. It has

risen 47% so far this year.

"As the U.S. dollar's status as the global reserve currency

is tested, gold is emerging as the preeminent safe haven and we

continue to view it as the ultimate diversifier," said Greg

Hirt, global CIO for multi asset at AllianzGI.

"We hold a long-term negative view on the U.S. dollar and we

are positioning for further falls in the short term."

Oil prices recovered slightly on the day but were on course

for steepest weekly decline in over three months. Brent crude

futures rose 0.6% to $64.51 a barrel. U.S. West Texas

Intermediate crude climbed 0.6% to $60.85 a barrel.