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Asian stock markets: https://tmsnrt.rs/2zpUAr4

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Yen up 0.9% after Tokyo inflation data

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Markets leaning towards a Dec hike from BOJ

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Dollar set for a 3% weekly drop on yen

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Wall Street futures up 0.1%, 10-yr yields hit 1-mth low

By Stella Qiu

SYDNEY, Nov 29 (Reuters) - Asian shares slipped on

Friday while the yen was aiming for its best week in four months

as strong local inflation data had traders favouring an imminent

rate hike from the Bank of Japan.

Overnight, trading in U.S. equities and Treasuries was

closed due to the Thanksgiving holiday, leaving little lead for

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

fell 0.3% and was down 0.5% for the week.

Japan's Nikkei dropped 0.7% as the yen

surged after Tokyo's inflation data.

Data showed core consumer prices in Japan's capital

accelerated in November and stayed above the central bank's 2%

target in a sign of broadening price pressure. The dollar fell

0.9% to 150.17 yen, bringing its weekly loss to 3%,

the biggest since late July.

Traders now see a 60% chance that the BOJ could hike

interest rates again in December, having been undecided before

the data. A strengthening economy and concerns over the

depreciating yen have recently added to the urgency for the BOJ

to act.

"We note that the acceleration in inflation, combined with

the solid recovery in monthly activity, increases the odds of

another BoJ rate hike in December," said analysts at ING in a

note.

"With the U.S. closed for Thanksgiving yesterday, and many

market participants likely extending the holiday to the weekend,

there isn't too much action in financial markets to talk about."

Wall Street futures rose 0.1% in Asia, while

Treasury yields eased as the cash market reopened in Japan.

Ten-year yields fell 2 basis points (bps) to 4.240%,

the lowest in a month, and were down 17 bps for the week, the

biggest since early September.

The dollar is down 1.4% against its major peers this

week as markets rekindled hopes for a U.S. rate cut in December.

Futures narrowed the odds of a quarter-point rate cut from the

Federal Reserve in December to 63%, from 55% a week ago,

according to CME Group's Fed Watch Tool.

Most of the action overnight was in Europe, where French

bond yields edged lower, a welcome bit of respite for France's

government, which saw its borrowing costs rise to their highest

over Germany's since 2012 on Wednesday.

French Prime Minister Michel Barnier on Thursday dropped

plans to raise electricity taxes in his 2025 budget, bowing to

far-right threats to bring the government down unless he eased

the burden on the working classes.

German inflation missed forecasts in November, suggesting

some downside risk for the eurozone inflation reading due later

in the day.

Traders are still leaning towards a 25-bps rate cut from the

European Central Bank in December, after a board member Isabel

Schnabel said it should only cut rates gradually.

Oil prices were up slightly but looked set for weekly losses

on the Israel-Hezbollah ceasefire deal in Lebanon. U.S. West

Texas Intermediate crude futures rose 0.1% to $68.76 a

barrel, but were down 2.5% for the week.

Gold is down 2.7% for the week at $2,638.29 per ounce