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Google, Microsoft ( MSFT ) earnings signal Wall Street relief rally

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US consumption data also aids sentiment

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Japan's yen sinks to another 34-year low

(Updated at 4:47 p.m. EST (2047 GMT)

By Chris Prentice and Naomi Rovnick

NEW YORK/LONDON, April 26 (Reuters) - Global stocks were

higher on Friday as Big Tech gains lifted Wall Street shares,

while Japan's yen sank to a 34-year low after the Bank of Japan

(BOJ) kept monetary policy loose.

MSCI's gauge of stocks across the globe

rose 6.80 points, or 0.90%, to 762.39 on tech sector optimism

following robust results from Alphabet and Microsoft ( MSFT ).

U.S. data also boosted sentiment, with the consumption

expenditures (PCE) price index up 0.3% in March, in line with

estimates by economists polled by Reuters. In the 12 months

through March, PCE inflation advanced 2.7% against expectations

of 2.6%.

The S&P 500 and the Nasdaq registered their biggest weekly

percentage gains since early November 2023.

The Dow Jones Industrial Average rose 153.86

points, or 0.40%, to 38,239.66, the S&P 500 gained 51.54

points, or 1.02%, to 5,099.96 and the Nasdaq Composite

gained 316.14 points, or 2.03%, to 15,927.90.

Europe's benchmark stock index had its biggest daily gain in

more than three months, closing up 1.2%, on gains in banking and

industrial stocks. The technology sector got a boost from upbeat

results from U.S. megacaps.

The dollar hit 158.275 yen, the highest since

June 1990.

World equities were poised to finish the month lower, as

hopes of rapid Fed rate cuts receded following a series of U.S.

inflation readings.

The Bank of Japan kept interest rates around zero at its

policy meeting, despite forecasting inflation of around 2% for

three years.

Markets are braced for Tokyo authorities to prop up the

currency, in what would be an unconventional and politically

tough decision. BOJ Governor Kazuo Ueda said on Friday that

exchange-rate volatility could significantly impact the economy.

U.S. Treasury Secretary Janet Yellen told Reuters on

Thursday that currency intervention was acceptable only in

"rare" circumstances and that market forces should determine

exchange rates.

Yellen also said U.S. economic growth was likely stronger

than suggested by weaker-than-expected data on first-quarter

output.

"The stall-out of inflation's return to 2% in the first

quarter is still a disappointment," Bill Adams, Chief Economist

for Comerica Bank in Dallas, said in a market note.

"When the Fed meets next week, they are almost certain to

say that the first quarter's economic data don't hit their high

bar to begin cutting interest rates."

The yen was trading about 40% below its fair value, Pictet

Asset Management chief strategist Luca Paolini said.

"We underestimate the potential for something to go very

wrong when you have a currency that is totally misaligned with

(economic) fundamentals," he said.

"The sooner they hike rates, the better."

YIELDS FALL

Longer-dated U.S. Treasury yields fell after data showed

inflation gains in March in line with economists' expectations.

The yield on benchmark U.S. 10-year notes fell

4.3 basis points to 4.663%, from 4.706% late on Thursday. Bond

yields rise as prices fall.

The 2-year note yield, which typically moves

in step with interest rate expectations, fell 0.5 basis points

to 4.9934%, from 4.998%.

Traders now expect the Fed to lower its main funds rate,

currently at a 23-year high of 5.25% to 5.5%, by just 36 basis

points this year, with some fearing a further hike.

Euro zone government bond yields fell as market expectations

for cumulative European Central Bank rate cuts this year dropped

way below 75 basis points on the back of strong U.S. economic

data.

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

closed 0.75% higher at 535.58, while Japan's

Nikkei rose 306.28 points, or 0.81%, to 37,934.76.

Spot gold added 0.21% to $2,336.79 an ounce. U.S.

gold futures GCcv1 settled 0.2% higher at $2,347.20.

Brent crude futures settled up 49 cents, or

0.55%, to $89.50 a barrel. U.S. West Texas Intermediate crude

futures settled up 28 cents, or 0.34%, to $83.85 a

barrel.

(Editing by Mark Potter, David Evans, Toby Chopra and David

Gregorio)