(Updates at 0515 GMT)

By Ankur Banerjee

SINGAPORE, June 20 (Reuters) - Asian stocks took a

breather on Thursday, hovering near their highest in two years

as traders waited for more U.S. policy clues, while sterling was

steady before a Bank of England meeting where rates are expected

to remain unchanged.

Apart from the BoE, investors will also watch for central

bank decisions from Switzerland and Norway on Thursday to set

the tone for a global rates outlook.

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

was little changed at 572.42, just below the

two-year high of 573.38 it touched on Wednesday boosted by tech

stocks. The index is on course for a 4% rise in June.

European stock markets were due for a higher open, with

Eurostoxx 50 futures and FTSE futures 0.2%

higher ahead of the slew of central bank decisions.

The pound was steady at $1.27125 in cautious

trading but is down 0.2% in June.

Data on Wednesday showed British inflation returned to its

2% target for the first time in nearly three years in May, but

strong underlying price pressures all but rule out an interest

rate cut ahead of election next month.

Most economists in a Reuters poll last week thought the

central bank would start to cut rates in August, but markets see

only a 30% chance of an August rate cut and think a first move

is more likely in September or November.

Markets have priced in 43 basis points of easing from BoE

this year.

The Swiss National Bank on the other hand is widely expected

to cut its key policy rate by 25 basis points for a second

straight meeting. Norway's central bank is likely to keep its

key policy interest rate unchanged.

In Asia, Japan's Nikkei was 0.10% higher, while

stocks in China and Hong Kong fell, weighed

down by lacklustre property shares, as Beijing left its key

benchmark lending rates unchanged despite recent data showing

the economy remains wobbly.

The onshore yuan weakened past 7.26 per dollar

for the first time since November.

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

against six rivals, was little changed at 105.27, while the euro

was steady at $1.0746.

A surge in tech stocks on Tuesday lifted AI chipmaker Nvidia ( NVDA )

above Microsoft ( MSFT ) as the world's most valuable

company, leading to a global rally in tech shares.

U.S. markets were closed on Wednesday, with tech heavy

Nasdaq futures up 0.5% on Thursday.

The frenzy over artificial intelligence has resulted in

technology stocks roaring through the year, with Nvidia ( NVDA ) leading

the pack along with select few behemoths as U.S. stocks clock

record highs and also boost Asian counterparts.

"Nvidia ( NVDA ) remains the most important stock in the world,"

Chris Weston, head of research at Pepperstone, said in a note.

Weston though cautioned that index market breadth has been

poor, with participation underwhelming, suggesting the rally has

been built on a shaky foundation.

"The fact remains the market is now all in on the rally in

AI-related names and big tech and given the lack of clear

immediate risk the path of least resistance is for higher equity

index levels."

On a macro level, investors are looking for fresh cues as to

when the Federal Reserve would start its policy easing cycle

after the central bank last week projected just one rate cut in

the year and policymakers this week have also been cautious.

The Japanese yen languished at 158.17 per dollar

as the wide difference in the interest rates between Japan and

the United States weigh on the currency. The yen is down over

10% against the dollar this year.

"I think the best-case scenario is September Fed interest

rate cut that narrows the yield differential between dollar and

yen", according to Stefan Hofer, chief investment strategist,

LGT Bank Asia.

In commodities, oil prices were mixed, with Brent

steady at $85.12 per barrel, while U.S. West Texas Intermediate

crude for June was 0.23% lower at $81.38 per barrel.