By Jamie McGeever

(Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist.

Asian markets are set for an explosive open on Wednesday after a below-consensus reading of headline U.S. inflation lit the touchpaper for a rally across all risky assets on Tuesday, although investors will be mindful of the steep rise in U.S. bond yields.

The fall in U.S. inflation to a two-year low has convinced investors the Federal Reserve will pause raising rates on Wednesday, and they like what they see - the S&P 500, Nasdaq and MSCI World index all hit their highest levels since April last year, the dollar fell and cash flowed out of safe-haven bonds.

The rush into riskier assets was also supported by China's de factor policy easing as the central bank cut reserve repo rates for the first time in 10 months. This could be a precursor to lower benchmark interest rates in the coming weeks - yuan traders certainly seem to think so.

Indian wholesale price inflation, unemployment and import and export prices from South Korea, and New Zealand's first quarter current account top the Asian and Pacific data calendar on Wednesday.

India's annual WPI inflation could be especially important. Economists expect a fall of 2.35% in May, pointing to the strongest deflationary pressures in three years. With the year-on-year global oil price still down around 40%, it could be even lower.

But the driving forces for markets will likely be global.

Traders are putting a 95% probability on the Fed standing pat on Wednesday, a consensus so strong the Fed will almost certainly respect. The focus for investors will be on the statement and Fed Chair Jerome Powell's press conference for signs on whether it will be a 'hawkish' or 'dovish' pause.

All of that will come after Asian markets close, so in the meantime local investors will take their cue from yet another remarkable performance on Wall Street, especially tech stocks and the Nasdaq.

The NYSE FANG+ index of mega tech stocks rose 0.9% for a fourth consecutive daily rise, bringing its year-to-date gains to 72%. The index has posted only four declines in the past 21 trading sessions.

Even beleaguered Chinese tech stocks are finally feeling the glow - the Hang Seng tech index is up 11% so far this month, outperforming the broader Hang Seng (up 7%) and significantly outpacing the main Chinese indices, which are up 1% or 2%.

The MSCI Asia ex-Japan index rose more than 1% on Tuesday, its second best day since March, while Japan's Nikkei hit a fresh 33-year high above 33,000 points.

Momentum across all these markets is coming from strong technical, positioning and 'fear of missing out' tailwinds. One major headwind, particularly for Asian assets, could be the surge in U.S. Treasury yields, although that for now at least is being mitigated by the dollar's slide to a three week low.

Here are key developments that could provide more direction to markets on Wednesday:

- India WPI inflation (June)

- South Korea unemployment (May)

- New Zealand current account (Q1)

(By Jamie McGEever)