Asian shares rise on rate cut bets

Asian shares made 15-month highs on Tuesday on renewed confidence of U.S. interest rate cuts, while a weaker yen and a small dip in the Australian dollar kept the dollar steady.

Australia's central bank left interest rates on hold, as expected, but the Aussie dollar slipped about 0.4% and the Australian stock market rose as policymakers did not strengthen guidance around the risk of another rate hike.

In Hong Kong the Hang Seng (.HSI), opens new tab was set to snap a 10-day winning streak with a 0.9% loss, though markets in Taiwan (.TWII), opens new tab and South Korea (.KS11), opens new tab were all higher.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab was up 0.3%. Japan's Nikkei (.N225), opens new tab rose 1.3%.

FTSE futures were up 1% pointing to a positive return from a market holiday. European futures rose 0.3% and S&P 500 futures were flat.

The mood was underpinned by last week's softer-than-expected U.S. jobs data and remarks from Federal Reserve Chair Jerome Powell reiterating that the next move in rates will be lower.

"(Powell) said that he is confident policy is restrictive and that if progress on inflation stalled, the (Fed) would hold off on cutting, implying a high bar to hiking," said Goldman Sachs economist David Mericle.

He also said, in a note to clients, that the U.S. hiring rate and other measures of employment growth intentions were soft and the weakest part of labour market data.

Treasuries, which rallied on Friday's jobs figures, traded steady in New York overnight and 10-year yields held at 4.49% in Tokyo on Tuesday. Interest rates markets price at least one U.S. rate cut this year, in November.

Demand will be tested at a $58 billion three-year note auction on Tuesday, which is followed by $42 billion in 10-year sales on Wednesday and $25 billion of 30-year sales on Thursday.