Asia stocks scale new highs, dollar weakens as investors eye Fed cut

• Market mood buoyant ahead of Fed decision
• Asia shares scale multi-year highs
• Trump economic adviser Miran gets Senate nod to join Fed board
• Investors eyeing slew of Fed cuts by year-end

By Rae Wee

SINGAPORE, Sept 16 (Reuters) - Asia stocks climbed on Tuesday while the dollar fell as investors bet the U.S. Federal Reserve would resume its easing cycle this week and potentially leave the door open to further rate cuts.

Markets hardly reacted to news that the U.S. Senate narrowly confirmed Stephen Miran to the Fed's Board of Governors while a U.S. appeals court separately declined to allow President Donald Trump to fire Fed Governor Lisa Cook.

Both moves were seen as unlikely to shift the needle for the Fed's decision on Wednesday, where a 25-basis-point cut is fully priced in.

"There are certainly concerns around the politicisation of the Fed and President Trump's pressure ... to try to sort of, I guess, stack the board," said Tony Sycamore, a market analyst at IG.

"But I think ... a 25-basis-point cut still remains in place."

Expectations of imminent Fed rate cuts have kept the market mood buoyant over the past few sessions and sent stocks scaling new highs.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose to a more than four-year top on Tuesday and last traded 0.7% higher, while Japan's Nikkei .N225 and Topix .TOPX indexes notched fresh records.

EUROSTOXX 50 futures STXEc1 were flat while FTSE futures FFIc1 rose 0.08%. DAX futures FDXc1 edged up 0.03%.

Just as important for markets will be Fed members' "dot plot" projections for rates and guidance from Fed Chair Jerome Powell on the extent and pace of any further easing.

Futures already have 127 bps worth of cuts priced in by July 2026, so anything less than dovish will disappoint investors. 0#USDIRPR

"There do seem to be quite a few rate cuts priced in now. On balance, maybe that suggests that the bar for a hawkish surprise is a little lower than that for a dovish one," said Thomas Mathews, head of markets for Asia Pacific at Capital Economics.

"It's likely though that the Fed will stick with its cautious communication approach and not give much away."

Elsewhere, Hong Kong's Hang Seng Index .HSI was up 0.08%, while China's CSI300 blue-chip index .CSI300 fell 0.38%.

Nasdaq futures NQc1 rose 0.14% while S&P 500 futures ESc1 gained 0.08%, after both indexes scaled all-time highs in the cash session overnight.

Shares of Nvidia NVDA.O ended slightly lower after China on Monday accused the AI chipmaker of violating the country's anti-monopoly law in the latest escalation in the Sino-U.S. trade war.

In other news, U.S. and Chinese officials said on Monday they have reached a framework agreement to switch short-video app TikTok to U.S.-controlled ownership that will be confirmed in a Friday call between Trump and Chinese President Xi Jinping.

DOLLAR EASES

The Fed cut bets have in turn kept pressure on the dollar, which on Tuesday fell to its lowest since July 24 against a basket of currencies =USD.

Sterling GBP=D3 rose to its highest in over two-months at $1.3624, while the euro EUR=EBS also hit its highest since July 24 at $1.1787.

The risk-sensitive Australian dollar AUD=D3 peaked at a 10-month top of $0.6677, before pulling back slightly to last trade 0.1% lower at $0.6662.

"The Aussie has been outperforming in recent weeks because markets have been expecting the FOMC to restart interest rate cuts and that's positive for the global economic outlook, and at the same time... trade uncertainty has eased," said Carol Kong, currency strategist at Commonwealth Bank of Australia.

U.S. Treasury yields were little changed after falling in the previous session, with the two-year yield US2YT=RR last at 3.5366%. The benchmark 10-year yield US10YT=RR was steady at 4.0375%. US/

In commodities, oil prices extended their rise from the previous session, as investors assessed the impact of Ukrainian drone attacks on Russian refineries. O/R

Brent crude futures LCOc1 rose 0.25% to $67.61 per barrel, while U.S. crude CLc1 edged 0.27% higher to $63.47 a barrel.

Spot gold XAU= scaled a record high of $3,689.27 an ounce, supported by a weaker dollar and Fed cut expectations. GOL/