GLOBAL MARKETS-Shares muted in Asia, high yields test lofty valuations

* Asian stock markets : https://tmsnrt.rs/2zpUAr4 * Nikkei slip, Wall St futures tick down * Dollar underpinned by high Treasury yields * Light data diary dominated by PMI surveys (Updates prices, adds Jeju shares) By Wayne Cole SYDNEY, Dec 30 (Reuters) - Asian shares made a muted start to the week on Monday as high Treasury yields challenged rich Wall Street equity valuations while underpinning the U.S. dollar near multi-month peaks. Volumes were light with the New Year holiday looming and a rather bare data diary this week. China has the PMI factory surveys out on Tuesday, while the U.S. ISM survey for December is due on Friday. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dipped 0.2%, but is still 16% higher for the year. Japan's Nikkei .N225 eased 0.9%, but is sitting on gains of around 20% for 2024. South Korea's main index KS11 has not been so fortunate, having run into a storm of political uncertainty in recent weeks, and is saddled with losses of 9% for the year. It was last up 0.3%. Shares of South Korean budget carrier Jeju Air 089590.KS hit their lowest level on record on Monday, in the wake of a plane crash that killed 179 people. Chinese blue chips .CSI300 added 0.3%, to be up almost 16% on the year with almost all that gain coming in just two weeks in September after Beijing promised more stimulus. EUROSTOXX 50 futures STXEc1 firmed 0.1%, while FTSE futures FFIc1 and DAX futures FDXc1 were little changed. S&P 500 futures ESc1 and Nasdaq futures NQc1 were both off 0.1%. Wall Street suffered a broad-based sell off on Friday with no obvious trigger, though volumes were just two-thirds of the daily average. .N The S&P 500 is up 25% for the year and the Nasdaq 31%, which is stretching valuations when compared to the risk-free return of Treasuries. Investors are counting on earnings per share growth of just over 10% in 2025, versus a 12.47% expected rise in 2024, according to LSEG data. Yet yields on 10-year Treasuries US10YT=RR are near eight-month highs at 4.631% and ending the year around 75 basis points above where they started it, even though the Fed delivered 100 basis points of cuts to cash rates. "The continued rise in bond yields, driven by the reassessment of less restrictive monetary policy expectations, creates some concern," said Quasar Elizundia, a research strategist at broker Pepperstone. "The possibility that the Fed may keep restrictive monetary policy for longer than expected could temper corporate earnings growth expectations for 2025, which could in turn influence investment decisions." Bond investors may also be wary of burgeoning supply as President-elect Donald Trump is promising tax cuts with few concrete proposals for restraining the budget deficit. Trump is expected to release at least 25 executive orders when he takes office on Jan. 20, covering a range of issues from immigration to energy and crypto policy. Widening interest rate differentials have kept the U.S. dollar in demand, giving it gains of 6.5% for the year on a basket of major currencies =USD . The euro has lost more than 5% on the dollar so far in 2024 to last stand at $1.0427 EUR=EBS , not far from its recent two-year trough of $1.0344. The dollar held near a five-month top on the yen at 157.79 JPY= , with only the risk of Japanese intervention preventing another test of the 160.00 barrier. The strength of the dollar has been something of a burden for gold prices, though the metal is still 28% higher for the year so far at $2,624 an ounce XAU= . GOL/ Oil has had a tougher year as concerns about demand, particularly from China, kept a lid on prices and forced OPEC+ to repeatedly extend a deal to limit supplies. O/R Brent LCOc1 rose 6 cents to $74.23 a barrel, while U.S. crude CLc1 added 1 cent to $70.61 per barrel. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asia stock markets https://tmsnrt.rs/2zpUAr4 Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Wayne Cole; Editing by Shri Navaratnam and Sam Holmes) (([email protected]; 612 9171 7144; Reuters Messaging: [email protected])) ((To read Reuters Markets and Finance news, click on https://www.reuters.com/finance/markets For the state of play of Asian stock markets please click on: 0#.INDEXA ))