GLOBAL MARKETS: Asian markets make nervous start ahead of US Fed's policy decision

SINGAPORE - Stocks made tentative gains at the start of the Asian trading session on Wednesday as a rise in global bond yields and oil prices paused ahead of the Federal Reserve's policy decision due later in the day.

MSCI's broadest index of Asia-Pacific shares outside Japan .MISX00000PUS fluctuated between gains and losses after declining for four consecutive sessions and was last up 0.2%, led by a 0.8% gain in Korean shares .KS11. S&P 500 e-mini futures EScv1 nudged 0.1% higher.

Overnight on Wall Street, the S&P 500 .SPX slumped 0.5%, marking its second consecutive day of declines as the yield on the 10-year Treasury bond hit its highest level since 2007.

"U.S. equity markets closed lower overnight as rising Treasury yields, another jump in crude and the polarised debate around pacing AI development left the market in a cautious mood," said Tony Sycamore, market analyst at IG in Sydney.

The yield on the U.S. 10-year Treasury bond was 0.8 basis point lower at 4.9875% in Asian trade after breaching the 5% mark on Tuesday for the first time in three years, ahead of a rate decision from the Federal Reserve and a media conference by Fed Chair Kevin Warsh.

Traders believe that a hike from the Federal Reserve is almost assured, pricing an implied 92.4% probability of a 25-basis-point hike when it announces its policy decision, according to the CME Group's FedWatch tool, compared to a 59.4% chance a week ago.

The U.S. dollar index =USD, which measures the greenback's strength against a basket of six currencies, was trading near a two-week high at 99.656.

Oil prices slipped as trading resumed in Asia, with Brent crude futures LCOc1 down 0.6% at $108.08 a barrel after rising 2.9% on Tuesday after shipping industry sources said crude loadings at Saudi Arabia's Red Sea export hub of Yanbu had been suspended and Riyadh had cancelled some cargo deliveries to European customers.

Digital assets extended losses after the U.S. Senate on Tuesday voted against advancing comprehensive cryptocurrency legislation backed by President Donald Trump. Bitcoin BTC= slid 0.1% to $75,816.24, while ether ETH= slipped 0.2% to $2,403.27.

-Reporting by Gregor Stuart Hunter; Editing by Sonali Paul/Reuters