By Ankur Banerjee

SINGAPORE (Reuters) - Asian equities edged higher on Thursday, while the dollar firmed slightly as traders took stock of trade negotiations between the U.S. and Japan even as uncertainties around tariffs implemented by President Donald Trump kept sentiment fragile.

Investors were also digesting comments from Federal Reserve Chair Jerome Powell, who warned of the risk of slowing growth and rising prices due to tariffs, while gold prices scaled record highs again on safe-haven flows.

The spotlight stayed on technology shares after a bruising session on Wednesday in the wake of warnings from bellwethers Nvidia and ASML, and ahead of earnings from Taiwan's TSMC.

Japan's Nikkei rose 0.7% while the yen weakened as Japan kicked off talks with the United States. Trump, who unexpectedly joined the negotiations, declared "big progress" in the discussions with lead Japanese negotiator Ryosei Akazawa.

Charu Chanana, chief investment strategist at Saxo, said markets are detecting signs of hope again in trade talks, with U.S.-Japan negotiations and China's openness to discussions reviving risk appetite, especially in beaten-down, trade-sensitive markets.

"When the bar is low, even talks about talks can lift markets as investors rotate from fear to hope."

In Asia, stock markets were mixed, after U.S. stocks closed sharply lower. South Korea's benchmark index rose 0.7%, while Taiwan stocks fell 0.5%. European futures pointed to a subdued start.

Elsewhere, Powell said the Fed would wait for more data on the economy's direction before making any changes to interest rates.

"Powell is between a rock and a hard place," said Tom Graff, chief investment officer at Facet. "The Fed can't act proactively to stem any potential economic weakness, given that tariffs are likely to also cause inflation."

All eyes will be on the earnings forecast of the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co, to gauge the health of the chip industry.

Chip stocks across the globe were pummelled on Wednesday after Dutch giant ASML warned that tariffs were increasing uncertainty around its outlook for 2025 and 2026.

Also weighing on sentiment was AI pioneer Nvidia warning of a $5.5 billion hit after Washington restricted exports of its AI processor tailored for China.

"The chipmakers are very cyclical, so if we go into recession for any reason that's bad for chipmakers and we could see a contraction in demand," said Chris Zaccarelli, chief investment officer at Northlight Asset Management.