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US tech shares surge on Meta, Microsoft ( MSFT ) earnings

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BOJ stands pat on rates

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Dollar holds gains after Fed announcement

(Updates after BOJ decision)

By Gregor Stuart Hunter

SINGAPORE, July 31 (Reuters) - Asian equities slipped on

Thursday, weighed down by weaker-than-expected Chinese activity

data and a plunge in copper prices, while the yen firmed after

the Bank of Japan raised its inflation forecast for the fiscal

year and held rates steady.

The revised forecast suggested cautious optimism that

Japan's trade deal with the U.S. would help the economy avert a

steep downturn and set the BOJ on a path to hike interest rates

later in the year.

The yen firmed 0.6% to 148.62 per U.S. dollar

immediately after the central bank maintained short-term

interest rates at 0.5%, as expected, by a unanimous vote.

Japanese shares showed little reaction to the

decision and were last up 0.9%.

In an action-packed 24 hours, investors were also digesting

a trade deal between the U.S. and South Korea, a Federal Reserve

decision to hold rates steady and strong earnings from megacap

tech firms.

Nasdaq futures surged 1.2% after better-than-expected

earnings from Microsoft ( MSFT ) and Meta Platforms ( META ).

S&P 500 futures advanced 0.8%, while the U.S. dollar

held steady after hitting a two-month high.

Both tech companies' earnings reports "have shot the lights

out", reporting higher revenue from cloud computing and

artificial intelligence-enabled ad targeting respectively, said

Tony Sycamore, a market analyst at IG in Sydney.

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

eased 0.7%, though it was still on track for its

fourth consecutive monthly gain in July.

Stocks in Hong Kong and China led declines after official

PMI gauges showed weaker-than-expected economic activity during

July.

The Federal Reserve's rate-setting committee voted 9-2 on

Wednesday to hold interest rates steady for the fifth

consecutive meeting, with two Fed governors dissenting for the

first time in more than three decades.

Fed Chair Jerome Powell's comments after the decision

undercut confidence that borrowing costs would begin to fall in

September.

The dollar index was at 98.812, just shy of the

two-month high of 99.987 it touched on Wednesday. The index is

set to clock a 3.1% gain for the month, its first in 2025.

"Although the Federal Reserve decided to keep rates steady

at its recent rate setting decision, the chance of rate cuts at

upcoming meetings remain live as they balance softening economic

data with the potential for persistent inflation," said Manusha

Samaraweera, fixed income investment director at Capital Group.

U.S. gross domestic product growth rebounded more than

expected in the second quarter, but the details of the report

painted a picture of an economy that was losing steam and

plagued by uncertainty from President Donald Trump's

protectionist trade policies.

The Korean won appreciated 0.3% after Trump said

the U.S. will charge a 15% tariff on imports from South Korea,

which will in return invest $350 billion in U.S. projects and

purchase $100 billion in U.S. energy products.

The announcement is the latest in a series of trade policy

deals rushed out before an August 1 deadline to avert the

imposition of the April 2 "Liberation Day" tariffs.

Trump's tariff blitz cast a shadow on global markets,

with negotiations on trade with India still under way after

Trump earlier announced that the U.S. will impose a 25% tariff

on goods imported from the country.

Meanwhile, copper futures plunged 19% after Trump

said the U.S. will impose a 50% tariff on copper pipes and

wiring, as the details of the levy fell short of the sweeping

restrictions expected and left out copper input materials such

as ores, concentrates and cathodes.

Oil prices were little changed on Thursday, with Brent crude

futures for September delivery, which are set to expire

on Thursday, down 0.19% at $73.1 a barrel, while U.S. West Texas

Intermediate crude for September was flat at $70.01 a

barrel.

The more active Brent October contract eased 0.14%

to $72.37 per barrel.