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Nikkei notches new record, yen steady before BOJ decision

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Wall St futures flat after record closes

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Investors await Trump-Xi call

By Stella Qiu

SYDNEY, Sept 19 (Reuters) - Asian shares are set to end

a big central week in positive territory, buoyed by hopes of

more monetary stimulus around the world, while the Nikkei

notched a record aided by expectations the Bank of Japan would

again skip a rate hike.

This week, central banks in the United States, Canada and

Norway cut interest rates while the Bank of England held steady.

The Bank of Japan is widely expected to keep its easy monetary

policy unchanged on Friday amid domestic political

uncertainties.

"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."

On Friday, Japan's Nikkei rallied 0.7% to hit

another record high ahead of the BOJ meeting. That brought the

weekly gain to 2% after a 4% jump the previous week. The

Japanese yen was steady at 148 per dollar.

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.

"Given political uncertainty, a BOJ rate hike may have to

await the outcome of the LDP leadership elections on 4 Oct,"

said Chang Wei Liang, a FX & credit strategist at DBS Group.

He added that comments from LDP candidate Sanae

Takaichi, who holds a press conference later on Friday to

explain her policies, could weigh on the yen somewhat given her

bias towards accommodative fiscal and monetary policy.

South Korea lost 0.4% but still hovered near a

record level. It was up 1.5% for the week, bringing the total

gain over the past two weeks to almost 8%.

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

slipped 0.3% on Friday but is still set for a

weekly rise of 0.5%, 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 0.2%, while Hong

Kong's Hang Seng eased 0.3% ahead of an expected phone

call between President Donald Trump and his Chinese counterpart

Xi Jinping.

There is a lot for investors to mull leading into that

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

outlining its chip plans, 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 the foreign exchange markets, the dollar rebounded after

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

at 97.42, finding some support after plunging to a multi-year

low of 96.224 just on Wednesday.

The pound held losses at $1.3542, having slid 0.6%

overnight as the BOE kept rates unchanged at 4%. The dollar

gained 0.9% on the Norwegian crown 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.

In commodity markets, oil prices were steady on Friday,

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 held at $3,647 an ounce.

(Editing by Sam Holmes)