(Updates levels throughout, adds analyst comment in para 24, chart showing U.S. PCE inflation)
* MSCI Asia-ex Japan tad firmer, KOSPI up 0.5 pct
* Stocks continue to be supported by strong Q1 earnings
* Jitters over whether strong corporate earnings can continue
* China-U.S. trade talks, U.S. data in focus this week
By Swati Pandey
SYDNEY, April 30 (Reuters) - Asian shares extended gains on Monday as tensions in the Korean Peninsula eased and first-quarter earnings shone, although some investors were cautious about the outlook amid the backdrop of a simmering U.S.-China trade dispute.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS climbed 0.9 percent after gaining more than 1 percent on Friday. The index is poised to eke out a modest rise this month after two consecutive losses.
South Korea's KOSPI index .KS11 rose 0.6 percent and is set to end April nearly 2.5 percent higher following record profits from tech giant Samsung Electronics 005930.KS and after a spectacularly successful inter-Korean summit.
Hong Kong's Hang Seng index .HSI climbed 1.6 percent, Australia's benchmark index .AXJO gained 0.5 percent while New Zealand shares .NZ50 gave up early losses to be up 0.3 percent.
Liquidity was low on Monday with Japan, China and India on holiday and much of Asia closed on Tuesday.
Overall, stocks continue to be supported by strong first quarter corporate earnings. More than half of Wall Street's S&P 500 .SPX companies have reported and 79.4 percent have beaten consensus estimates.
Analysts now expect earnings growth of 24.6 percent, more than double forecasts at the beginning of the year and thanks in large part to hefty tax cuts.
But investors have grown increasingly jittery with the U.S. Federal Reserve signalling faster rate rises this year and the European Central Bank seen likely to end its generous bond-buying programme soon.
"The key question for 2018 remains to what extent can the benign environment persist?" said Jacob Mitchell, Chief Investment Officer of Australian investment boutique Antipodes which has A$7 billion in assets under management.
Global shares had a dream run in 2017 helped by the first synchronous world growth in decades coupled with easy monetary policies in most of the developed world.
"We believe the unusually favourable goldilocks combination of accelerating growth and tepid inflation experienced in 2017 will not repeat," Mitchell added.
"Instead, normalisation of interest rate policy will likely upset the rhythm with more volatile and less forgiving markets."
Indeed, the MSCI Asia ex-Japan index is almost flat so far in 2018 compared with a more than 13 percent jump in the same period last year.
E-Mini futures for the S&P 500 ESc1 edged up 0.2 percent, after Wall Street was barely changed on Friday following a turbulent week. .N
Investors will turn their focus to a torrent of data from the United States this week including consumer spending later in the day, the Fed's policy decision on Wednesday, and a jobs report on Friday.
Separately, a delegation of U.S. officials, including Treasury Secretary Steven Mnuchin and President Donald Trump's top economic and trade advisers - Larry Kudlow, Robert Lighthizer and Peter Navarro are all expected in China later this week for trade negotiations. U.S.-China relationship had turned sour earlier this year when Trump announced stiff tariffs on some Chinese imports, setting off a tit-for-tat response from Beijing.
Political tensions in the Korean Peninsula are also showing signs of easing, following a historic summit between North Korean leader Kim Jong Un and South Korea's Moon Jae-in last week at which they vowed "complete denuclearization".
U.S. Secretary of State Mike Pompeo said on Sunday that he told Kim that the North Korea leader would have to agree to take "irreversible" steps toward abandoning nuclear weapons if he was to reach a deal with Trump. was dealt another blow early in Asia when Britain's interior minister resigned - adding to the considerable troubles of Prime Minister Theresa May's government. pound was last buying $1.3772 GBP=D4 , after falling 0.9 percent on Friday when disappointing economic growth data challenged expectations the Bank of England would raise rates in May. A couple of weeks ago it had been as high as $1.4377.
"The GDP print missed the already-lowered-expectations and May quickly repriced to around a 25 percent chance of a hike," wrote analysts at Citi in a note.
"We do not expect a hike next month and expect a more dovish meeting than is currently anticipated."
The U.S. dollar was barely changed after retreating on Friday, with its index against six major peers at 91.567 .DXY .
The euro also trod water at $1.2125 EUR= , while the dollar inched up on the yen to 109.12 JPY= though it has had a tough time trying to break resistance at 109.50.
Oil prices eased from recent highs with Brent crude futures LCOc1 off 33 cents at $74.31 a barrel, while U.S. crude CLc1 lost 18 cents to $67.92.
Spot gold pared early gains to be flat at $1,321.9 an ounce.
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http://reut.rs/2sSBRiD US PCE inflation
https://reut.rs/2JDmEcQ
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