(Reuters) - A look at the day ahead in Asian markets.

Asian markets should open in upbeat mood on Wednesday as lower U.S. bond yields and a weaker dollar reflect expectations that the Fed will cut interest rates as early as September, but the apparent serenity could be shattered in a flash.

The most obvious flash point is April's U.S. inflation report after Asia closes on Wednesday - punchier-than-expected figures will force investors to rethink their Fed outlook, lifting the dollar and yields, and weighing on risk appetite.

Tuesday's U.S. producer price inflation report was, to quote Fed Chair Jerome Powell himself, "mixed" - price growth in April was hotter than expected, but prior data were revised down.

Investors maintained a 'glass half full' stance though - equities rose, the dollar, yields and volatility drifted lower, and appetite for risky assets picked up.

There's nothing immediately obvious on the Asian economic calendar that might rock the boat on Wednesday - Australian wage growth data, Thai consumer confidence and Indonesian trade figures are the main indicators on tap.

The corporate calendar may generate a bit more trading activity in individual stocks, especially in Japan, where financial giants Mitsubishi UFJ, Mizuho and Sumitomo are all due to report full-year 2024 earnings.

Markets in China, meanwhile, may not react all that positively to the new tariffs on $18 billion of Chinese imports confirmed by the Biden administration on Tuesday.

China's commerce ministry said the move will "seriously affect the atmosphere of bilateral cooperation" and Italian Economy Minister Giancarlo Giorgetti said the G7 will discuss the risk of fragmenting global trade next week.

China will almost certainly respond in kind, it just remains to be seen how forcefully.

"Given the high stakes involved, this round of tariffs could ratchet up the trade tensions between the two countries in a way that is difficult to pull back from," said Eswar Prasad, trade policy professor at Cornell University and former IMF China department head.

Chinese stocks have plateaued this week after mixed earnings, at best, from Alibaba and Tencent, and selling pressure on the yuan is increasing again - dollar/yuan's daily fixing rate has risen five days out of the last six.

The dollar is also gaining ground on the Japanese yen, even though 10-year Japanese bond yields are marching to their highest level since November while U.S. yields slip. The yen's fragility is bound to put traders on high intervention alert.

Here are key developments that could provide more direction to markets on Wednesday:

- Australia wage growth (Q1)

- Indonesia trade (April)

- Japanese financials earnings