(Adds China comments from Trump, updates prices)

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Dollar set for worst weekly loss in two months

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Chinese stocks get a boost from Trump comments

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Yen steady ahead of expected rate hike from BOJ

By Koh Gui Qing and Ankur Banerjee

NEW YORK/SINGAPORE, Jan 24 (Reuters) - Global shares

rose on Friday buoyed by the prospect of lower U.S. interest

rates and a U.S.-China trade deal following comments from

President Donald Trump, while the yen steadied ahead of a widely

expected hike from the Bank of Japan.

In a sign of policies to come, Trump told business leaders

at the World Economic Forum in Davos, Switzerland, on Thursday

that he wants to lower global oil prices, interest rates and

taxes, and warned of tariffs on exports to the United States.

"I'll demand that interest rates drop immediately. And

likewise, they should be dropping all over the world," Trump

said from Washington via video conference on Thursday.

The comments moved markets, with the S&P 500 hitting

a record high and the dollar on the defensive as investors

remain cautious about Trump's next moves on trade and tariffs.

"No politician advocates for higher rates and he (Trump) has

always put himself out there as a low rates guy," said Prashant

Newnaha, a senior Asia-Pacific rates strategist at TD

Securities. "Expect the president to become more vocal and

critical of the Fed."

MSCI's broadest index of Asia-Pacific shares outside

Japan rose 0.6% boosted by Chinese stocks after

Trump said his recent conversation with President Xi Jinping was

friendly, adding he thought he could reach a trade deal with

China.

"I can do that," Trump said in an interview with Fox News,

when asked if he could make a deal with China over fair trade

practices.

"But we have one very big power over China, and that's

tariffs, and they don't want them, and I'd rather not have to

use it, but it's a tremendous power over China,"

Those comments sent China's CSI300 blue-chip index

0.6% and Hong Kong's Hang Seng index 1.7%

higher. The Australian and New Zealand dollars, as well as the

yuan, rose on signs of a softer stance on tariffs from Trump.

With no new details on Trump's tariff plans, the uncertainty

has weighed on bond prices. Treasury yields have been on the

rise as bond investors brace for eventual tariffs that may stoke

inflation.

The U.S. 10-year Treasury yield was at 4.637%

in Asia hours, below last week's 14-month high of 4.809%.

"Trump had already signalled the desire for lower rates

before his return, and U.S. data simply does not allow for the

level of easing Trump wants without lighting a match under

inflation," said Matt Simpson, a senior market analyst at City

Index.

AWAITING BOJ

The spotlight on the day will be on the BOJ, with the

European Central Bank and the Federal Reserve due to meet next

week as policymakers digest early moves of the Trump

administration.

Markets have already fully priced in a 25-basis-point rate

hike from the BOJ that would take rates in Japan to their

highest since the 2008 global financial crisis.

Kristina Clifton, economist at the Commonwealth Bank of

Australia, said the lack of immediate announcements on tariffs

from Trump in his early days as president has supported the

markets view for a hike on Friday.

"In our view, if the BOJ hikes today there is a good chance

that there is a dovish tone because there is still a high risk

of economic and market disruptions from U.S. policy."

The yen was steady at 156.21 per dollar, near the

one-month high of 154.78 it touched earlier this week, while the

yields on shorter ended Japanese government bonds rose ahead of

the decision. The Nikkei was up 0.38% in early trading.

Currency markets in general have been tentative after a

volatile few sessions since Trump's return to the White House,

driven by his pronouncements on tariffs.

Trump has said he plans to impose duties on imports from

Mexico and Canada from Feb. 1 and has said he will apply tariffs

on imports from the European Union.

The U.S. dollar index, which measures the currency

against six others, languished near a two-week low of 108.13 and

was poised for a more than 1% drop for the week, its weakest

performance in two months.

Oil prices remained well below $80 a barrel, under pressure

after Trump said he will be asking Saudi Arabia and OPEC to

bring down oil prices.

Brent crude futures fell 0.56% to $77.85 a barrel.

U.S. West Texas Intermediate crude (WTI) was down 0.51%

at $74.24.