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BOJ holds rates as expected, yen a fraction firmer

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Nikkei down slightly, US and European futures dip

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All eyes on Apple ( AAPL ) and Amazon ( AMZN ) earnings updates

(Updates with BOJ decision)

By Kevin Buckland

TOKYO, Oct 31 (Reuters) - Asian stocks slid on Thursday

as chip-sector stocks tracked overnight declines by Wall Street

peers and Facebook owner Meta Platforms ( META ) warned of

accelerating costs for artificial intelligence.

More megacap tech earnings are due later in the day from

Apple ( AAPL ) and Amazon ( AMZN ).

The yen hovered close to a three-month low against the

dollar, weighed down by political instability as a drubbing for

Japan's ruling coalition in parliamentary elections last weekend

could delay a normalisation of monetary policy.

The Bank of Japan made little mention of politics when

keeping rates unchanged on Thursday, reiterating only that there

were many uncertainties about the economic outlook.

Its policy statement ran to just two lines, while a

separate economic update showed it still planned to tighten

policy over time if the economy developed as expected.

More broadly, the dollar was taking a breather, having

pulled back from a near three-month peak to major peers on

Wednesday.

Investors were also treading warily ahead of U.S. non-farm

payrolls data on Friday, the presidential election next Tuesday

and a Federal Reserve policy decision on Thursday.

Japan's Nikkei share average fell 0.5% as of 0155

GMT. South Korea's Kospi dropped 1.3%.

North Korea stirred regional tensions by test firing what a

U.S. official said was an intercontinental ballistic missile

into the sea off the reclusive nation's east coast on Thursday.

Hong Kong's Hang Seng added 0.2%, but mainland

Chinese blue chips slipped 0.7%. Investors are

awaiting more clarity on stimulus from Beijing next week, when

officials convene a week-long congress.

Surveys on manufacturing and services in China did show some

pick up in activity, with the official purchasing managers'

index (PMI) rose to 50.1 in October.

Taiwanese markets were shuttered due to a typhoon.

S&P 500 futures eased 0.35%, while Nasdaq futures

dipped 0.47%. The Philadelphia SE semiconductor index

slumped 3.35% overnight, with Advanced Micro Devices ( AMD )

tumbling more than 10% following dour forecasts.

EUROSTOXX 50 futures and DAX futures both

eased 0.4%, while FTSE futures fell 0.1%.

TOUGH MONTH FOR YEN

The U.S. dollar index was steady at 104.15 following

its pullback from the highest since Aug. 2 at 104.63 reached on

Tuesday.

The dollar was a fraction lower on the yen at 153.36

, but not far from this week's high of 153.885.

The dollar is still up a heady 6.8% so far in October

and heading for its best month since late 2016 as political

uncertainty in Japan further delays rate hikes.

The euro has also gained 4% on the yen this month to

reach 166.65 yen.

"Japan's messy political situation is a boon for currency

speculators," said Shoki Omori, chief Japan desk strategist at

Mizuho Securities. But for the most part, "the ball is on the

dollar side," he said.

"If the U.S. sees more mixed data, we might see higher

volatility in the pair," Omori said. "Non-farm payrolls is going

to change the picture if it comes out completely different from

consensus."

The personal consumption expenditures index, the Fed's

preferred measure of inflation, is also due later on Thursday.

Meanwhile, in the final stretch of the U.S. presidential

contest, opinion polls still put Republican Donald Trump and

Democrat Kamala Harris neck-and-neck, although financial markets

and some betting platforms have been leaning toward a Trump

victory.

Gold reached a fresh all-time high of $2,790.15 per

ounce.

Oil prices extended a rally from Wednesday, driven by

optimism over U.S. fuel demand following an unexpected drop in

crude and gasoline inventories.

Brent crude futures gained 0.5% to $72.90 a barrel

and U.S. West Texas Intermediate crude futures climbed

0.5% to $68.93 per barrel. Both contracts rose more than 2% in

the previous session.