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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 prices at 0620 GMT)

By Kevin Buckland

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

as chip-sector stocks tracked overnight declines by Wall Street

peers, while Facebook owner Meta Platforms ( META ) and

Microsoft ( MSFT ) both warned of accelerating costs for

artificial intelligence.

That stoked worries for the same from Amazon ( AMZN ), which

reports earnings along with Apple ( AAPL ) later in the day.

The yen rose from near a three-month low against the dollar,

with the statement accompanying the Bank of Japan's as-expected

on-hold decision on Thursday containing some hawkish undertones,

spurring some analysts to flag the possibility of a December

interest rate hike.

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 ended the day down

0.5%. South Korea's Kospi dropped 1.5%.

North Korea stirred regional tensions by test firing what a

U.S. official said was an intercontinental ballistic missile on

Thursday.

Hong Kong's Hang Seng added 0.3%, and mainland

Chinese blue chips rose 0.2%, reversing an earlier

decline, after surveys on manufacturing and services in China

did show some pick up in activity.

Investors are awaiting more clarity on stimulus from Beijing

next week, when officials convene a week-long congress.

Taiwanese markets were shuttered due to a typhoon.

S&P 500 futures eased 0.5%, while Nasdaq futures

dipped 0.8%. 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 about 0.4%, while FTSE futures fell 0.3%.

"Sentiment is shakier this morning," said Michael Brown, a

senior research strategist at Pepperstone.

"Meta's increasing capex on AI technology exerted pressure,

as risks around the theme continue to become more two-sided," he

said. "This, of course, tees things up in somewhat precarious

fashion for Nvidia ( NVDA ) earnings."

AI darling Nvidia ( NVDA ) is the last of the so-called

"Magnificent 7" megacap tech companies to report earnings, in

about three weeks from now. Tesla reported last week,

with Alphabet following on Tuesday.

TOUGH MONTH FOR YEN

The U.S. dollar index was steady at 104.10 following

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

Tuesday.

The dollar eased 0.4% on the yen to 152.80,

although that was still not far from this week's high of

153.885.

Nikko Asset Management's chief global strategist, Naomi

Fink, noted "some hawkish rhetoric" in the BOJ's policy

statement, including "inflationary risks biased toward the

upside" for next fiscal year.

"I wouldn't rule out a December rate hike, especially if the

yen weakens further," she said.

The dollar is still up a heady 6.4% so far in October as

political uncertainty in Japan following the coalition

government's lost majority in parliamentary elections at the

weekend, which potentially delays BOJ policy normalisation.

"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 towards 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 0.6% to $72.99 a barrel

and U.S. West Texas Intermediate crude futures climbed

0.7% to $69.05 per barrel. Both contracts rose more than 2% in

the previous session.