TOKYO, Oct 30 — Asian share markets slipped today, as the prospect of a rate cut by the Federal Reserve was countered by worries a Sino-US first-stage trade deal could be delayed.

MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.33 per cent from yesterday's three-month high while Japan’s Nikkei lost 0.35 per cent after hitting a one-year high the previous day.

On Wall Street overnight, the S&P 500 index touched a record intraday high, led by strong earnings from drug manufacturers such as Merck and Pfizer, before ending down 0.08 per cent.

Markets had erased gains after Reuters reported a US administration official said an interim trade agreement between Washington and Beijing might not be completed in time for signing in Chile next month as expected.

A disappointing profit report from Google parent Alphabet kept the technology-rich Nasdaq in the red, with the Nasdaq Composite falling 0.59 per cent.

MSCI’s gauge of stocks across the globe slipped 0.06 per cent in Asia today from a 21-month high reached yesterday.

Since US President Donald Trump outlined what he called the first phase of a trade deal with China earlier this month, investors have bet on a trade truce between the two countries, driving global equities higher.

Expectations of further US monetary policy loosening also emboldened investors, with a reduction of 0.25 percentage point later in the day almost seen as a done deal.

"With a cut today completely priced in, markets are looking to the Fed’s stance on its policy outlook,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

While Fed funds rate futures fully price in a 25 — basis-point cut today, only about a 30 per cent chance of another cut in December has been priced in, compared with about 70 per cent earlier this month.

"I think the Fed will clearly indicate that a rate cut in December is not its main scenario,” said Tomoaki Shishido, macro strategist at Nomura Securities.

Fading expectations of aggressive rate cuts by the Fed have lifted the two-year US bond yield to 1.644 per cent, compared with a two-year low of 1.368 per cent in early October.

The 10-year US Treasuries yield stood at 1.833 per cent , near a 1-1/2-month high of 1.860 per cent touched earlier this week.

That has helped to lift the dollar against the yen. The dollar was traded at ¥108.86, after having hit a three-month high of ¥109.07.

The euro stood at US$1.1107, having bounced off from yesterday's low of US$1.10735 (RM4.63).

Sterling wobbled after Britain decided to hold an election on December 12 following Prime Minister Boris Johnson winning approval from parliament for an early ballot aimed at breaking the Brexit deadlock.

While Johnson seeks to gain a parliamentary majority to ratify his Brexit deal, the election would be highly unpredictable as Brexit has fatigued and enraged swathes of voters, while eroding traditional loyalties to the two major parties, Conservative and Labour.

The currency last traded at US$1.2861.

Oil prices slipped after an industry report that stocks at the Cushing delivery hub for the benchmark rose last week, shrugging off a drop in overall inventories.

US West Texas Intermediate (WTI) crude lost 0.47 per cent to US$55.28 per barrel while international benchmark Brent crude futures dropped 0.19 per cent to US$61.47 a barrel. — Reuters