SYDNEY: Asian shares extended gains on Tuesday, taking cues from Wall Street as focus shifts to earnings results from U.S. tech giants in the week, while a still strong dollar pressured the Japanese yen to fresh 34-year lows.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5%, helped by a 1% jump in Taiwanese shares and a 0.8% advance in Hong Kong's Hang Seng index.

The Asian index rose 1% the day before on easing fears of a major escalation in the Middle East conflict, recovering some of the 3.7% losses last week. Japan's Nikkei edged up 0.1%.

Tech shares in the region cheered. Taiwan Semiconductor Manufacturing Co Ltd rallied 1.5% while MSCI Asia-Pacific ex-Japan IT index jumped 0.8%.

However, Chinese shares fell, with the blue chips losing 0.6%.

On Wall Street, big tech shares outperformed ahead of their quarterly results this week, sending the Nasdaq 1.1% higher. AI darling Nvidia gained 4.4% while Amazon.com rose 1.5% and Alphabet jumped 1.4%, although Tesla dropped 3.4 as it cut prices in its major markets.

"Odds are the earnings reports that we see over the next few weeks will be positive, but obviously there's still issues around what the Fed will do the next," said Shane Oliver, chief economist at AMP. "It's too early to say that problems in the Middle East have gone away."

"There are lots of things that could cause volatility between now and the end of the year. And so we're probably coming to a more constrained, more volatile period for markets."

Tech giants including Tesla, Meta Platforms, Alphabet and Microsoft announce their earnings results this week.

UBS on Monday downgraded its rating on the mega-cap companies, warning that profit growth momentum of the so-called Big Six technology stocks could "collapse" over the next few quarters.

In addition to top corporate earnings, markets are also awaiting the release later this week of the U.S. gross domestic product figures and the March personal consumption expenditure data - the Fed's preferred inflation gauge - to further ascertain the trajectory of monetary policy.

Traders see the first Fed rate cut would most likely come in September, while the total easing expected this year would just be 40 basis points, a sea change from about 150 basis points of cuts priced in at the beginning of the year.

The drastic shift in interest rate expectations has seen the two- and 10-year U.S. Treasury yields both rising almost 100 basis points from recent lows.

On Tuesday, they were little changed amid a lack of data and news, with two-year yields holding at 4.9713% and 10-year yield at 4.6167%.

The diverging rate outlook between the U.S. and the Europe has weighed on the euro, which was pinned at $1.0659, nearing a five-month low of $1.0601 hit last week.

The beleagured yen kept hitting fresh 34-year lows. It firmed 0.1% to 154.71 per dollar, after plumbing another fresh low of 154.85 overnight.

Risk of intervention remains high after Japan finance minister Shunichi Suzuki said last week's trilateral meeting with his U.S. and South Korean counterparts laid the groundwork for Tokyo to take appropriate action in the foreign exchange market.

Oil prices recovered some of the sharp losses overnight as investors continued to assess the situation in Middle East. Brent futures rose 0.2% to $87.16 a barrel, while U.S. crude gained 0.2% to $82.06 a barrel.

Gold prices, however, lost 1% to $2,295.9 per ounce, after slumping 2.7% overnight.

(Reporting by Stella Qiu. Editing by Sam Holmes)