News: BHP GLOBAL MARKETS-Stocks face worst month since September, yen swings after BoJ

	  Global stocks down 3.3% for the month  

	  Google, Microsoft earnings signal Wall Street relief rally 

	  Japan's yet hits fresh 34-year low then rebounds sharply 

(Updates prices at 0930 London time, adds fresh commentary)

Global stocks were teetering on Friday towards their worst month since September, although futures markets predicted strong tech earnings would spark a Wall Street relief rally later in the day that would help traders recoup some losses.

Japan's yen was volatile, hitting a fresh 34-year low after the Bank of Japan (BOJ) kept monetary policy loose at its latest policy meeting, then rebounding. Traders are speculating that Japanese authorities might intervene to support the currency.

MSCI's broad index of global stocks .MIWD00000PUS was down 3.3% for the month, although 0.17% higher on the day.

World equities have slid this month as hopes of rapid Fed rate cuts this year drained from the market following a series of

hotter

than expected U.S. inflation readings.

Still, contracts that wager on Wall Street's tech-heavy Nasdaq 100 NQc1 were more than 1% higher, while those on the benchmark S&P 500 index ESc1 rose 0.8%, after earnings from

Alphabet GOOGL.O and Microsoft MSFT.O beat estimates. These moves came ahead of a fresh reading of U.S. core personal consumption expenditures, the Fed's preferred inflation measure, that could sway rate cut hopes and strengthen the dollar.

In a volatile session on Friday, the yen JPY=EBS , weakened as far as 156.8 per dollar after the Bank of Japan kept interest rates around zero at its policy meeting that concluded Friday despite forecasting inflation of around 2% for three years.

The currency then jumped suddenly to 155 per dollar before retreating, although it was not immediately clear what caused the move.

Finance Minister Shunichi Suzuki said on Friday that Japan was concerned about the negative effects of a weak yen, adding to a chorus of aggressive jawboning from authorities in recent weeks, though it has had little effect.

Japan intervened in the currency market three times in 2022, selling the dollar to buy yen, first in September and again in October as the yen hit 152 per dollar.

DOLLAR FIRMNESS

The U.S. currency has strengthened against peers as traders now expect the Fed to lower its main funds rate, currently at a 23-year high of 5.25% to 5.5%, by just 36 basis points this year, with some fearing a

further hike

	.  
   
		With the U.S. housing market, labour market and consumer 

spending strong, inflation could spike again instead of falling in a straight line towards the Fed's average 2% target, said Frederic Leroux, head of cross asset at fund manager Carmignac.

The central bank is "not willing to trigger a deep recession, so we will have more inflation but potentially also more growth," he said.

The two-year Treasury yield US2YT=RR , which reflects short term interest rate expectations, hovered near 5% on Friday. The benchmark 10-year yield US10YT=RR rose 2 bps to 4.71%, almost 50 bps higher since late March. Bond yields rise as prices of the debt instruments fall.

In Europe on Friday, the benchmark Stoxx 600 share index .STOXX rose 0.6%, still heading for a 1.4% monthly drop.

European government debt investors have also had a disappointing month, despite euro zone inflation having dropped towards the European Central Bank's 2% target.

The ECB is expected to cut its deposit rate from a record 4% in June but analysts have queried how far it can diverge from U.S. monetary policy without weakening the euro significantly.

The two-year German bond yield DE2YT=RR , which moves in line with short-term rate expectations, rose 4 bps on Friday to just over 3%.

Germany's 10-year bund DE10YT=RR Friday 2.605% after rising 31 bps in April so far.

The euro EUR=EBS traded at $1.073, 0.5% lower against the dollar so far this month.

Elsewhere, Asian stocks outside Japan added 0.8% .MIAPJ0000PUS , Tokyo's Topix TOPX rose 0.9% and Brent crude oil LCOc1 gaind 0.5% to $89.47 a barrel.

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World FX rates YTD	http://tmsnrt.rs/2egbfVh 

Global asset performance http://tmsnrt.rs/2yaDPgn BOJ keeps rates steady BOJ keeps rates steady https://reut.rs/4aSLW3u

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