* Nikkei gains but Kospi slips, Wall St futures ease

* Dollar holds firm after spike in Treasury yields

* Yen hits fresh 40-year low, on watch for intervention

* Oil edges up as U.S.-Iran talks look deadlocked for now

By Wayne Cole

SYDNEY, July 1 (Reuters) - Asian share markets started the

new quarter in a cautious mood on Wednesday as talks between

the United States and Iran hit new hurdles, while investors were

on alert for possible Japanese intervention as the yen plumbed

fresh 40-year lows.

Tehran said on Tuesday it would not meet with top U.S.

envoys who had flown to the region, with the two sides still far

apart on a framework that would fully open the Strait of Hormuz.

Bond markets were also under pressure after U.S. Treasury

yields spiked overnight as futures narrowed the odds on rate

hikes from the Federal Reserve ahead of crucial jobs figures on

Thursday.

All eyes will thus be on Fed Chair Kevin Warsh when he

appears at a European Central Bank conference later in the

session, for any guidance on the need for a tightening.

Unfortunately for traders, Warsh has long been against the

Fed providing forward guidance and may keep his policy cards

close to his chest.

Futures imply a 33% probability the Fed could hike

rates at its next meeting later this month, while a September

move is priced around 70%.

Equity investors are betting the coming earnings season will

be bright enough to offset the rate risk and continue to pile

into favoured tech trades.

Japan's Nikkei climbed another 1.0%, having surged

37% last quarter. The rush for everything tech helped boost

sentiment among big manufacturers to heights not seen since

2018, according to closely watched survey out on Wednesday.

A separate survey showed manufacturing had boasted its best

quarter since 2014 as new orders surged.

South Korea's main index slipped 1.4%, having risen

an eye-watering 68% in the second quarter on booming AI-related

demand for semiconductors. MSCI's broadest index of Asia-Pacific

shares outside Japan held steady.

In Europe, EUROSTOXX 50 futures and DAX futures

were flat, while FTSE futures dipped 0.2%. S&P

500 futures and Nasdaq futures both eased 0.1%,

after making solid gains overnight.

LOT RESTING ON EARNINGS

A pause was understandable given Wall Street just notched up

its biggest quarter since 2020, led by an 88% climb in the

Philadelphia Semiconductor Index.

"The historical record certainly favours the bulls," noted

Chris Weston, head of research at broker Pepperstone. "Since

2008, Nasdaq futures have recorded only one negative July."

"The upcoming earnings season will therefore be critical in

determining whether earnings expectations continue to improve

and whether portfolio allocations continue shifting towards

technology."

The major banks kick off reporting from mid-July and

analysts have high expectations for profits in the tech sector,

and more broadly.

Strong earnings will be needed to offset the attractiveness

of higher bond yields and the risk of a rise in the cash rate.

Yields on 10-year Treasuries stood at 4.55%, having

jumped almost 9 basis points on Tuesday.

The rise helped lift the dollar to a fresh four-decade peak

on the yen at 162.715, extending a bull run that

stretches back to early May.

The climb has drawn the usual threats of intervention from

Tokyo, though the authorities seem reluctant to act having spent

almost 12 trillion yen through April and May to little lasting

effect.

Tim Baker, a macro strategist at Deutsche Bank, noted the

latest move had been more about dollar strength than yen

weakness, with the yen having been broadly steady against other

major currencies for months now.

A steep slide in oil prices had also benefited Japan greatly

as a net energy importer, he added, while real yield spreads had

widened slightly in the yen's favour.

"The upshot is that our fair value model has steadily

dropped, now sitting in the low 150s," said Baker. "Japan

policymakers may be sitting back and hoping for dollar strength

to cease, so we think yen weakness will be limited from here."

The euro was flat at $1.1409, just above the

recent 13-month trough of $1.1325.

Inflation data for the European Union due later are forecast

to show a dip to 3.0% in May, from 3.2% the previous month, and

a further decline is likely as lower oil prices feed through.

Investors no longer think a July rate rise is likely from

the ECB, putting the chance at just 32%. Indeed, markets imply

that one further hike to 2.5% could mark the end of this

tightening cycle.

As for oil, Brent crude was up 0.5% at $73.31, but a

world away from its May peak of $126.41, while U.S. crude

added 0.7% to $69.96 a barrel.

Gold remained out of favour after a very tough quarter,

easing 0.4% to $3,990 an ounce.