By Scott Murdoch

SYDNEY, Nov 25 (Reuters) - Asian share markets rallied on Tuesday as hopes grew the Federal Reserve will deliver a December interest rate cut, while investors piled into global technology stocks shrugging off concerns the sector was becoming overheated.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1% led mainly by tech stocks, recouping some of the losses from last week when it fell 4%. The index is on course for a 3.8% drop in the month, its first monthly decline since March.

Japan's Nikkei .N225 was up 0.8% in early trading on Tuesday after returning from a holiday on Monday. The index slid 3.5% last week as a bout of risk-off sentiment gripped markets.

"Nice to see widespread cross-asset class green on the screens this morning as volatility eases a notch and the Fed put comes into play again," Charlie Aitken, Regal Partners' investment director, said in a note.

"This is classic bull equity market behaviour. A short, sharp pullback in stocks and sectors that have led the market, a flush out of the over-leveraged at the bottom, and a recovery starts, led by the most beaten-up growth stocks and cyclicals."

The prospect of a U.S. rate cut is rising after Fed Governor Christopher Waller said available data indicated that the U.S. job market remains weak enough to warrant another quarter-point cut to interest rates.

Markets are pricing in an 85.1% chance of a cut of 25 basis points at the December meeting, according to CME's FedWatch Tool, up from 42.4% a week ago. The U.S central bank will meet on December 9 and 10.

San Francisco Federal Reserve Bank President Mary Daly told the Wall Street Journal she supported lowering interest rates at the central bank's meeting next month as she sees a deterioration in the job market.

In the Asian trading session, the yield on benchmark 10-year Treasury notes US10YT=RR was flat at 4.0344%. The two-year yield US2YT=RR, which rises with traders' expectations of a higher Fed funds rate, was steady at 3.4872% in Asian hours after dropping 2.5 basis points in the previous session.

The sudden shift in rate cut wagers have weighed slightly on the dollar. The euro EUR= last bought $1.1522 after eking out small gains overnight. The dollar index =USD was at 100.2 in early trading.

Despite the dollar's slight weakness this week, the Japanese yen JPY= has remained fragile, trading at 156.95 per dollar in early Asian hours, not far from the 10-month low of 157.90 it touched last week.

An ongoing row between Tokyo and Beijing over a comment by Japan's Prime Minister Sanae Takaichi earlier in November that a Chinese attack on Taiwan could trigger a Japanese military response remains in focus.

Takaichi and U.S. President Donald Trump spoke on Tuesday, following his call on Monday with Chinese President Xi Jinping. She said Trump explained U.S.-China relations to her.

Trump said on Monday he would travel to Beijing in April at the invitation of the Chinese government. The proposed meeting was interpreted as a further sign diplomatic and political relations between the two countries are improving following their trade war truce.

On Wall Street, the Dow Jones Industrial Average .DJI rose 0.44%, the S&P 500 .SPX was 1.55% higher and the Nasdaq Composite .IXIC rose 2.69% fuelled by large gains in tech stocks.

The session marked the Nasdaq's biggest daily percentage rise since May 12 and the best two-day rise since November 2024.

U.S stock and bond markets will be closed on Thursday for the Thanksgiving holiday and will trade for half a day on Friday.

In commodities, Brent crude futures LCOc1 were down 0.2% at $63.16 a barrel, while U.S. crude futures CLc1 were also off 0.2% at $58.70 per barrel.

Spot gold XAU= was 0.2% lower at $4,130 an ounce.

(Reporting by Scott Murdoch; Editing by Sonali Paul)

((Scott.Murdoch@thomsonreuters.com;))