GLOBAL MARKETS-Shares on tenterhooks as Fed cut priced, guidance uncertain

*

Nikkei slips in nervous Asia trade, S&P futures flat

*

Fed seen cutting 25bps, focus on dots and Powell

*

Yen shaky after stumble takes it to record low on euro

*

Silver's bull run breaks more chart barriers

(Updates prices to Asia afternoon)

By Wayne Cole

SYDNEY, Dec 10 (Reuters) - Asian shares and Wall Street futures hunkered down on Wednesday as crunch time neared for a divided Federal Reserve policy board, and earnings results threatened to test sky-high valuations in the AI space.

With most assets frozen in the Fed headlights, attention was grabbed by a sudden slide in the Japanese yen and the continued dizzy ascent of silver prices, with both hitting record levels.

The futures market, at least, is confident the Fed will cut rates by a quarter point to 3.50-3.75% later in the day, pricing it at a 89% probability. Yet it also assumes the guidance will be hawkish, implying just a 21% chance of a January move.

Much will depend on how many "dot plot" forecasts from Fed members see one, two or no more cuts next year. Analysts also suspect at least two of the 12 voters could dissent against an easing, putting Chair Jerome Powell in a difficult position.

"Powell will likely get across that the bar for future cuts has risen and explain why some participants opposed a cut," wrote David Mericle, chief U.S. economist at Goldman Sachs.

"But the Fed cannot box itself in too much - especially at a time when we are two employment reports out of date - because a January cut could turn out to be appropriate."

The November payrolls report has been delayed to December 16 because of the government shutdown, while inflation figures are due two days later.

Debt markets could be pleasantly surprised should analysts at BofA prove right and the Fed announces plans to start buying Treasury bills from January to head off a liquidity squeeze.

For now, equity investors were putting discretion ahead of valour and kept trading to a minimum. Japan's Nikkei started higher but soon fell 0.2%, while South Korea had barely budged.

MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.1%, while Chinese blue chips fell 0.8% in the wake of mixed inflation data.

Consumer price inflation picked up to an annual 0.7% in November, but still slipped for the month alone, while producer prices remained mired in deflation.

EARNINGS TEST FOR AI INFRASTRUCTURE

EUROSTOXX 50 futures and DAX futures both eased 0.1%, while FTSE futures fell 0.3%

S&P 500 futures and Nasdaq futures were little changed ahead of key earnings from tech major Oracle and Broadcom (AVGO).

"What they detail on capex intentions and future funding plans could resonate across the AI space, and there are clear risks they could miss on cloud infrastructure," said Chris Weston, head of research at broker Pepperstone.

"The options market is pricing an earnings-day move of around -/+10%, so outsized volatility is certainly expected."

In anxious bond markets, 10-year Treasury yields were steady for the moment at 4.187%, having climbed from a low of 3.962% in just the nine sessions.

A break of 4.201% chart support would risk a spike toward 4.535%, making the Fed's outlook all the more important.

The rise in yields has put a prop under the dollar, further assisted by a broad bout of selling in the yen overnight which looked to be driven by momentum-tracking funds.

The euro was up at 182.12 yen, having broken to an all-time high of 182.64 overnight. The pound hit peaks not seen since mid-2008 at 208.95 yen.

The dollar stood at 156.61 yen, having risen 0.5% on Tuesday, and was a shade softer on a basket of currencies at 99.202.

Silver was again the star in commodities, having cleared the $60 barrier to reach a record $61.45 per ounce. The metal has more than doubled in price this year as inventories dwindled and a bullish trend drew demand from momentum funds.

There is also rising real demand from sectors including solar energy, electric vehicles and their infrastructure, and data centres and artificial intelligence, the Silver Institute industry association said in a research report.

Gold was quieter at $4,206 an ounce, having peaked at $4,381 back in October.

Oil prices steadied, having lost ground early in the week when Iraq restored production at Lukoil's West Qurna 2 oilfield, one of the world's largest.

Brent edged up 0.2% to $62.04 a barrel, while U.S. crude rose 0.2% to $58.35 per barrel. (Reporting by Wayne Cole; Editing by Sonali Desai)