By Rae Wee SINGAPORE (Reuters) -Asian stocks staged a tentative rebound on Wednesday, helped by dovish comments from Federal Reserve Chair Jerome Powell and upbeat bank earnings on Wall Street, though simmering U.S.-China trade tensions kept a lid on risk appetite. Powell left the door open to further rate cuts on Tuesday and said the end of the central bank's long-running effort to shrink the size of its holdings may be coming into view. His comments, viewed by some as dovish, lifted markets slightly and reinforced expectations of more easing this year, with roughly 48 basis points worth of cuts priced in by December. "The Fed may soon be looking to conclude (quantitative tightening) with an announcement at its upcoming October FOMC meeting possible," said Tom Kenny, senior international economist at ANZ. "We expect the Fed to cut by 25bp at both the October and December FOMC meetings." Solid earnings results from U.S. banking giants and an upward revision of the International Monetary Fund's 2025 global growth forecast also underpinned the market, which had taken a nosedive on renewed signs of strain in U.S.-China trade relations. MSCI's broadest index of Asia-Pacific shares outside Japan was last up 0.45%, while the Nikkei rose 0.8% after sliding 2.6% in the previous session. Nasdaq futures and S&P 500 futures edged up about 0.1% each. Still, sentiment remained fragile, with U.S. President Donald Trump saying on Tuesday that Washington was considering terminating some trade ties with China, including in relation to cooking oil. The U.S. and China also began charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil. Markets have been whipsawed in the past few sessions by a sharp escalation in the U.S.-China trade war after Trump announced additional 100% duties on Chinese goods in retaliation for Beijing's dramatically expanded export controls on rare earths. "It does suggest that a lasting truce is not going to be easy to achieve. But it's also a reminder as well, that the market does need to be mindful that… they shoot these arrows and then they sort of walk them back," said Tony Sycamore, a market analyst at IG. U.S. Trade Representative Jamieson Greer separately said on Tuesday that it depended on China whether additional 100% tariffs on its exports to the United States kick in on November 1 or sooner, but acknowledged it might be hard for Beijing to find an off-ramp. POLITICAL UNCERTAINTY In France, Prime Minister Sebastien Lecornu promised on Tuesday to suspend a landmark pension reform until after the 2027 election, in a move that provided some relief to investors. European futures were up sharply in Asia, with EUROSTOXX 50 futures gaining 0.8%. FTSE futures and DAX futures were also up roughly 0.3% each. "I think anything that will bring some relief to the back-and-forth within the French parliament is an absolute win," said Juan Perez, director of trading at Monex USA. The euro was last a touch higher at $1.1611, though it has largely been insulated from the ongoing political turmoil in France. In the broader currency market, the dollar was weighed down by the Fed cut bets, falling 0.25% against the yen to 151.42 and 0.06% against the Swiss franc to 0.8009. The safe-haven yen and the Swissie also found some support from the fragile risk sentiment. Elsewhere, spot gold extended its record-breaking run and was last up 0.9% at $4,179.80 an ounce, helped by geopolitical and economic uncertainties and the U.S. rate cut expectations. [GOL/] Oil prices slipped, with Brent crude futures down 0.1% to $62.33 a barrel, while U.S. crude eased 0.07% to $58.66 per barrel. [O/R] (Reporting by Rae Wee, additional reporting by Gertrude Chavez-Dreyfuss; Editing by Sam Holmes)
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