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Asian stock markets: https://tmsnrt.rs/2zpUAr4

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Nikkei dips, S&P 500 futures flat

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US and European inflation data loom in holiday week

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Japan warns on yen weakness ahead of 152.00 per dollar

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PBOC sets a firmer fix for yuan

(Updates at 0900 GMT)

By Huw Jones

LONDON, March 25 (Reuters) - Investors kicked off a

shortened week in subdued mood on Monday with stock benchmarks

steady near last week's lifetime highs as looming U.S. inflation

data provides the next milestone in the summer rate cut

narrative.

The dollar eased, with the threat of currency

intervention from Japanese authorities and a government-driven

rally in China's yuan weighing on the U.S. currency.

The yen, however, was still within striking distance of a

32-year low as Japan's top currency diplomat said on Monday the

currency's weakness did not reflect fundamentals, adding to the

rhetoric of government officials who have stepped up warnings in

recent days over the currency's decline.

Crude oil prices rose on concerns over tighter

global supply brought about by escalating conflicts in the

Middle East, and attacks on energy infrastructure in the war

between Russia and Ukraine.

The MSCI All Country stock index was down

0.1%, though still only about 5 points below its all-time high

of last Thursday.

In Europe, the STOXX index of 600 companies was a

touch weaker at 509.4 points after hitting a lifetime high of

510.46 points last Friday. Goldman Sachs raised its 2024 target

for the benchmark to 540 from 510, citing potential improvement

in economic growth and rate cuts.

On Wall Street, where stock indexes also hit record highs

last week, the S&P 500 on Friday ended with its biggest

weekly percentage gain of 2024 after the U.S. Federal Reserve

stuck with projections for three rate cuts by year's end.

Jason Da Silva, director of global investment strategy at

Arbuthnot Latham, said the Fed's comments gave markets some

comfort, and that Monday's signs of consolidation in stocks

should not be surprising after the momentum seen so far this

year.

"The market is just taking in what it's seen in the last

week or two, but unless there are any major surprises in either

inflation or growth, it's hard to see where the market cracks

come through," Da Silva said, adding that he was watching oil

prices closely, given the impact any big rise could have on

reviving inflationary pressures.

U.S. stock index futures were

slightly weaker.

U.S. INFLATION DATA

The main data event of the week will be the U.S. core

personal consumption expenditure (PCE) price index on Friday,

which is seen rising 0.3% in February, keeping the annual pace

at 2.8%. Analysts say that anything higher would be taken as a

setback to bets for a Fed rate cut in June.

Many markets are closed for Easter on Friday, when the PCE

data is due for release, so the full reaction will have to wait

until next week.

Fed Chair Jerome Powell was sufficiently dovish last week to

leave futures implying around a 74% chance of a June easing, up

from 55% a week earlier.

Powell will participate in a moderated discussion at a

policy conference on Friday, while Fed governors Lisa Cook and

Christopher Waller are also appearing this week.

Europe has its own inflation tests with consumer price data

out from France, Italy, Belgium and Spain, ahead of the overall

EU CPI report on April 3.

Sweden's central bank meets on Wednesday and is generally

expected to keep rates at 4.0%, though a surprise easing by the

Swiss National Bank (SNB) last week has markets anticipating a

dovish statement.

In Asia, Japan's Nikkei dipped 1.1%, having spiked

5.6% last week to a fresh all-time peak as the yen weakened.

Even a shift away from super-easy policies by the Bank of

Japan (BOJ) could not dent the dollar, as investors assumed it

was not the start of a series of hikes and futures imply a rate

of just 20 basis points by year end.

The dollar was trading at 151.34 yen, having

climbed 1.6% last week to a peak of 151.86. Markets are wary of

testing 152.00 as that is a level that has drawn Japanese

intervention in the past.

The euro was trading at $1.08145, having been

dragged down in the wake of the Swiss franc after the

SNB's rate cut.

The strength of the dollar had taken some shine off gold,

though the metal was edging higher again to $2,165 an ounce

, after hitting a record peak of $2,217.79 last week.

Oil prices were underpinned by Ukraine's attacks on Russian

refineries, along with data showing a fall in U.S. rig counts.

Brent rose 0.3% to $85.66 a barrel, while U.S. crude

firmed 0.3% to $80.91 per barrel.