By Kevin Buckland
TOKYO (Reuters) - Asian stocks rose on Tuesday while U.S. bond yields and the dollar hung back from multi-month highs as traders awaited President-elect Donald Trump's cabinet selection and sought to gauge the outlook for Federal Reserve easing.
Tech shares advanced, tracking Wall Street's recovery from last week's steep losses although Nvidia (NASDAQ:NVDA)'s upcoming earnings on Wednesday limited the scope for big moves.
Markets have pared bets for a quarter-point interest-rate cut at the Fed's next meeting in December to less than 59%, down from 62% a day earlier and more than 65% a week ago, according to CME FedWatch.
Trump's mooted fiscal spending, higher tariffs and tighter immigration are seen as inflationary by analysts, potentially impeding Fed rate cuts, which are already being hampered by a run of resilient economic data.
Trump has begun making appointments, filling health and defence roles last week, but key positions for financial markets - Treasury secretary and trade representative - have yet to be announced.
Japan's Nikkei added 0.2% as of 0129 GMT, while South Korea's Kospi and Australia's equity benchmark each ticked up 0.1%.
Hong Kong's Hang Seng climbed 0.8%, and mainland blue chips gained 0.3%.
U.S. S&P 500 futures pointed slightly lower, but following a 0.4% advance overnight for the cash index.
MSCI's index of world stocks snapped a four-day losing streak on Monday.
"With a lack of data and a lull in market moving news...the marginal driver of asset prices right now is how the incoming Trump administration will impact economic conditions, international trade and global geopolitics," said Kyle Rodda, senior financial markets analyst at Capital.com.
"Concurrently, the markets are trying to estimate how those policies will impact interest rate settings, especially the Fed, with the markets walking back the depth of rate cuts previously discounted into the curve."
U.S. Treasury yields extended overnight declines, with the two-year yield ticking down to 4.278% and the 10-year yield edging down to 4.412%.
That kept pressure on the dollar, which languished close to its overnight low versus major peers. The dollar index, which tracks the currency against a basket of six others, was flat at 106.20, close to Monday's trough at 106.12. It reached the highest in a year at 107.07 on Thursday.
The dollar sagged 0.35% to 154.165 yen, while firming slightly to $1.0591 per euro.
Bitcoin, which surged to a record high of $93,480 last week on bets for more favourable cryptocurrency regulation under Trump, continued its week-long consolidation around $90,000, last trading at around $90,960.
Safe-haven gold was flat at $2,614.80 after jumping nearly 2% on Monday, its biggest one-day advance since mid-August, amid softness in the dollar and heightened concerns about the Russia-Ukraine conflict.
In a significant reversal of Washington's policy, President Joe Biden's administration allowed Ukraine to use U.S.-made weapons to strike deep into Russia, two U.S. officials and a source familiar with the decision said on Sunday.
The Kremlin said on Monday that Russia would respond to what it called a reckless decision by the Biden administration, having previously warned that such a decision would raise the risk of a confrontation with the U.S.-led NATO alliance.
The escalating tensions continued to push both crude oil benchmarks up on Tuesday, following gains of about $2 a barrel each in the previous session.
Brent crude futures added 7 cents to $73.37 a barrel, while U.S. West Texas Intermediate crude futures were at $69.26 a barrel, up 8 cents.
Crude was also buoyed by the shutdown of Norway's massive Johan Sverdrup oilfield due to a power outage.