SINGAPORE, April 26 (Reuters) - Asian shares rose

cautiously on Friday as markets sobered up to the idea that U.S.

rate cuts were most likely some time away, while the yen and

Japanese government bonds struggled ahead of a closely watched

policy decision by the Bank of Japan.

U.S. stock futures jumped after tech giants Alphabet

and Microsoft ( MSFT ) reported quarterly results that

beat Wall Street estimates. Nasdaq futures advanced more

than 1%, while S&P 500 futures rose 0.7%.

The highlight of the Asia day was on the BOJ's rate decision

at the conclusion of its two-day monetary policy meeting, as

well as Governor Kazuo Ueda's news conference thereafter.

Ahead of the outcome, the yen languished near a

34-year low and was little changed at 155.62 per dollar, while

the 10-year JGB yield rose to a five-month high

of 0.93%.

Other yields across the curve also notched fresh milestones,

with some hitting multi-year peaks. Bond yields move inversely

to prices.

Although expectations are for the BOJ to maintain its

accommodative monetary policy stance, focus will be on whether

the central bank makes any adjustments to its bond buying

amounts - seen as a way to deliver a more hawkish stance without

an outright rate rise.

Jiji news agency reported on Thursday, without citing

sources, that the central bank is set to consider measures to

reduce its government bond purchases.

That comes as the yen has been battered by a resurgent

dollar, even after the BOJ's landmark exit from negative rates

last month. Aggressive jawboning from Japanese authorities has

also done little to stem the yen's decline, leaving traders on

alert for any signs of intervention from Tokyo.

"There is a near consensus that the BOJ will stand pat on

its policy rate today, though it could signal an impending

reduction in JGB purchases in the future," said Alvin Tan, head

of Asia FX strategy at RBC Capital Markets. "I expect Ueda to

remain noncommittal on the timing of the next rate hike, but he

could repeat his previous point that the bank would consider the

impact of exchange rates on inflation."

Complicating matters for the BOJ, data on Friday showed core

inflation in Tokyo slowed much more than expected in April and

fell below the central bank's 2% target.

In stocks, Japan's Nikkei edged a marginal 0.02%

higher.

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

gained 0.27%, while Australia's S&P/ASX 200

index fell more than 1%.

Shares of BHP Group ( BHP ) fell 4% in the first day of

trading of its Australian-listed stock since revealing a $38.8

billion bid for smaller rival Anglo American in a deal

that would forge the world's largest copper miner.

Hong Kong's Hang Seng Index gained 0.3%.

FED OUTLOOK

Elsewhere, investors were digesting the implications of

Thursday's data which showed the U.S. economy grew at its

slowest pace in nearly two years in the first quarter, though

inflation accelerated.

That reinforced expectations that the Federal Reserve would

not cut interest rates before September.

"The U.S. Q1 GDP report delivered the worst of both worlds,

softer than expected growth and higher than expected inflation,"

said Rodrigo Catril, senior FX strategist at National Australia

Bank.

U.S. Treasury yields surged to five-month highs in the

previous session and remained elevated in Asia.

The two-year yield hovered near the 5% level,

while the benchmark 10-year yield steadied at

4.7019%.

The dollar, however, slipped on the back of the weaker U.S.

growth, and was nursing some of those losses on Friday.

Sterling dipped 0.09% to $1.2502 after touching a

two-week high on Thursday, while the euro edged 0.04%

lower to $1.0726.

Focus now turns to March's core PCE price index data due

later on Friday - the Fed's preferred measure of inflation - for

further clues on the U.S. rate outlook.

"We don't think inflation will give the Fed reason to

tighten," said James Reilly, a markets economist at Capital

Economics.

"Granted, the PCE data... could present another 'bump' in

the road, extending a succession of stronger-than-expected U.S.

inflation and activity prints; but the Fed has already

acknowledged that these would come," Reilly added. "We continue

to think that the disinflationary trend will reassert itself

soon and that Fed cuts have therefore been delayed, not

cancelled."

In commodities, Brent rose 0.38% to $89.35 a barrel,

while U.S. crude gained 0.35% to $83.86 per barrel.

Gold eased 0.08% to $2,329.50 an ounce.