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Global stocks down 3.3% for the month

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

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Japan's yet hits fresh 34-year low then rebounds sharply

(Updates prices at 0930 London time, adds fresh commentary)

By Naomi Rovnick and Rae Wee

LONDON/SINGAPORE, April 26 (Reuters) -

Global stocks were teetering on Friday towards their worst

month since September, although futures markets predicted strong

tech earnings would spark a Wall Street relief rally later in

the day that would help traders recoup some losses.

Japan's yen was volatile, hitting a fresh 34-year low

after the Bank of Japan (BOJ) kept monetary policy loose at its

latest policy meeting, then rebounding. Traders are speculating

that Japanese authorities might intervene to support the

currency.

MSCI's broad index of global stocks was down

3.3% for the month, although 0.17% higher on the day.

World equities have slid this month as hopes of rapid

Fed rate cuts this year drained from the market following a

series of

hotter

than expected U.S. inflation readings.

Still, contracts that wager on Wall Street's tech-heavy

Nasdaq 100 were more than 1% higher, while those on the

benchmark S&P 500 index rose 0.8%, after earnings from

Alphabet and Microsoft ( MSFT ) beat estimates.

These moves came ahead of a fresh reading of U.S. core

personal consumption expenditures, the Fed's preferred inflation

measure, that could sway rate cut hopes and strengthen the

dollar.

In a volatile session on Friday, the yen,

weakened as far as 156.8 per dollar after the Bank of Japan kept

interest rates around zero at its policy meeting that concluded

Friday despite forecasting inflation of around 2% for three

years.

The currency then jumped suddenly to 155 per dollar

before retreating, although it was not immediately clear what

caused the move.

Finance Minister Shunichi Suzuki said on Friday that

Japan was concerned about the negative effects of a weak yen,

adding to a chorus of aggressive jawboning from authorities in

recent weeks, though it has had little effect.

Japan intervened in the currency market three times in 2022,

selling the dollar to buy yen, first in September and again in

October as the yen hit 152 per dollar.

DOLLAR FIRMNESS

The U.S. currency has strengthened against peers as

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

.

With the U.S. housing market, labour market and consumer

spending strong, inflation could spike again instead of falling

in a straight line towards the Fed's average 2% target, said

Frederic Leroux, head of cross asset at fund manager Carmignac.

The central bank is "not willing to trigger a deep

recession, so we will have more inflation but potentially also

more growth," he said.

The two-year Treasury yield, which reflects

short term interest rate expectations, hovered near 5% on

Friday. The benchmark 10-year yield rose 2 bps to

4.71%, almost 50 bps higher since late March. Bond yields rise

as prices of the debt instruments fall.

In Europe on Friday, the benchmark Stoxx 600 share index

rose 0.6%, still heading for a 1.4% monthly drop.

European government debt investors have also had a

disappointing month, despite euro zone inflation having dropped

towards the European Central Bank's 2% target.

The ECB is expected to cut its deposit rate from a

record 4% in June but analysts have queried how far it can

diverge from U.S. monetary policy without weakening the euro

significantly.

The two-year German bond yield, which moves

in line with short-term rate expectations, rose 4 bps on Friday

to just over 3%.

Germany's 10-year bund Friday 2.605% after

rising 31 bps in April so far.

The euro traded at $1.073, 0.5% lower against

the dollar so far this month.

Elsewhere, Asian stocks outside Japan added 0.8%

, Tokyo's Topix rose 0.9% and Brent crude

oil gaind 0.5% to $89.47 a barrel.

(Editing by Gerry Doyle and Gareth Jones)