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Nikkei retreats from record high, yen gains after BOJ

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Wall St futures flat after record closes

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Investors await Trump-Xi call

(Updates with BOJ decision)

By Stella Qiu

SYDNEY, Sept 19 (Reuters) -

Asian shares were headed for weekly gains on Friday on hopes

of further rate cuts around the world, while the Nikkei

retreated from record highs after the Bank of Japan flagged a

further unwinding of its massive stimulus policies.

The BOJ maintained

short-term interest rates

at 0.5% on Friday, as widely expected, but two members

voted for a hike. It also decided to start selling its vast

holdings of exchange-traded funds (ETF) and real-estate

investment trusts (REIT).

The dollar lost 0.4% to 147.48 yen after the

decision. Japan's Nikkei, which hit a record high in

early trade, reversed gains and was last down 0.4%, trimming its

weekly gain to just 0.8%.

The focus now falls on BOJ Governor Kazuo Ueda's news

conference, scheduled for 0630 GMT.

Data showed Japan's core inflation ran at 2.7% in the

year to August, marking the slowest pace in nine months,

although it was still above the central bank's 2% target.

Earlier in the week, central banks in

the United States

,

Canada

and

Norway

cut interest rates, while the

Bank of England

held steady.

"With the past week's central banks decisions in the

rear-view mirror, it's clear that no one's been comfortable to

surprise," said James Rossiter, head of global macro strategy at

TD Securities.

"Ongoing uncertainty is clearly cutting policymakers' risk

appetites, though we expect cuts from many central banks at

their next meetings."

South Korea's benchmark share index lost 0.6% but

still hovered near a record level. It was up 1.3% for the week,

bringing the total gain over the past two weeks to over 7%.

MSCI's broadest index of Asia-Pacific shares outside Japan

was off 0.1% but still looked set for a weekly

rise of 0.7%, hovering not far from its four-year tops.

Friday is also the day when stock options, index options and

stock index futures all expire on the same day, leading to

increased trading activity and potential market volatility. Both

Nasdaq futures and S&P 500 futures were little

changed.

Chinese blue chips inched up 0.3%, while Hong

Kong's Hang Seng was flat ahead of an expected phone call

later in the day between President Donald Trump and his Chinese

counterpart Xi Jinping.

There is a lot for investors to consider leading into

that call, with a deal on TikTok possibly close, China's Huawei

outlining its chip plans, and Beijing ordering tech firms not to

buy Nvidia's ( NVDA ) AI chips.

Overnight, benchmark S&P 500, the Dow and the Nasdaq all

closed at record highs, helped by better jobless claims data and

news that Nvidia ( NVDA ) will invest $5 billion in the

struggling U.S. chipmaker Intel ( INTC ).

Intel ( INTC ) shares surged 23%, while Nvidia ( NVDA ) gained 3.5%.

In foreign exchange markets, the dollar rebounded after the

Fed's first cut in nine months. The dollar index held at

97.28, finding some support after plunging to a multi-year low

of 96.224 on Wednesday.

The pound held losses at $1.3557, having slid 0.6%

overnight as the BOE kept rates unchanged at 4%.

The dollar gained 0.9% on the Norwegian crown

overnight after the Norges Bank cut rates and signaled rates

could continue to fall.

In the bond market, 10-year Treasury yields held

at 4.1102%, having edged up 3 basis points overnight.

The 10-year Japanese Government Bond yield

jumped 4 bps to 1.635%, just short of this month's high of

1.64%, a level not previously seen since July 2008.

In commodity markets, oil prices were steady, after settling

lower in the previous session. U.S. crude was little

changed at $63.60 a barrel, while Brent was flat at

$67.47.

Spot gold prices gained 0.4% at $3,658 an ounce.

(Editing by Sam Holmes and Kim Coghill)