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Graphic: World FX rates http://tmsnrt.rs/2egbfVh

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Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn

By Dhara Ranasinghe and Rae Wee

LONDON, July 12 (Reuters) - Upbeat earnings and U.S.

rate cut hopes helped boost the mood in equity markets on

Friday, although skittishness prevailed in forex markets a day

after Tokyo was believed to have stepped in to prop up a weak

yen.

U.S. stock futures were mixed , while Europe's

STOXX 600 index rose to a one-month peak and London's FTSE-100

stock index gained 0.4%. Ericsson rose 8% after the

Swedish telecom gear maker reported a smaller-than-expected

drop in second-quarter sales.

U.S. earnings kick off later in the day with big banks

JPMorgan Chase ( JPM ), Wells Fargo ( WFC ) and Citigroup ( C/PN ).

That could shift the market focus temporarily away from the

U.S. rate outlook, a day after softer-than-expected inflation

data boosted bets that the Federal Reserve will cut rates in

September.

Markets price in a quarter point cut in September compared

to just over a 50% chance a month ago.

"The CPI is good news and obviously, equities to some

degree, like it, but we're seeing other indicators suggest

perhaps that things are softening in the U.S.," said James

Rossiter, head of global macro strategy at TD Securities.

"Equities in particular have to look at this kind of

potential easing from Fed cuts in September, against a clear

pivot going on in the growth picture and for some stock sectors,

it's going to be a bit more of a worry."

The tech-heavy Nasdaq closed almost 2% lower on Thursday, hit

by losses in Nvidia, Apple and Tesla as investors rotated into

smaller companies after the CPI release.

WILD YEN SWING

The yen swung between losses and gains in volatile trade. It

surged nearly 3% on Thursday in its biggest daily rise since

late 2022, shortly after U.S. consumer price figures revived

hopes that the Fed will cut rates in September.

Japan's top currency diplomat said authorities would take

action as needed in the foreign exchange market.

The dollar gained 0.2% to 159.20 yen on Friday,

after rising more than 0.3% to an intraday high of 159.45 yen

and falling 0.7% to a low of 157.75 yen in Asia trade.

"It's either one of two things - the market's either

jumping at shadows this morning waiting for a second round of

intervention, and I think now that the (Bank of Japan) has

committed again, there's good reason for them to come back,"

said Tony Sycamore, a market analyst at IG.

"The second thought is the market's just really skittish."

Moves were choppy in the other yen crosses though it

subsided over the course of the trading day, with the euro last

up 0.3% against the yen and sterling up

0.4%, both reversing early losses.

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

rose 0.1%, while Japan's Nikkei fell

more than 2%, dragged down by tech stocks.

In China, trade data on Friday was mixed. Exports grew at

their fastest pace in 15 months in June, while imports

unexpectedly shrank amid weak domestic demand, pointing to the

need for further stimulus to shore up the economic recovery.

Markets hardly reacted to the figures, with Chinese blue

chips rising 0.1%.

Elsewhere, sterling rallied 0.15% to $1.2932, just

shy of a roughly one-year high hit on Thursday, as comments from

Bank of England policymakers and a better-than-forecast GDP data

led traders to reduce bets on an August rate cut.

Oil prices, meanwhile, rose as signs of strong summer demand

and easing inflationary pressures in the United States bolstered

investor confidence.

Brent futures ticked up 0.6% to $85.89 per barrel,

while U.S. West Texas Intermediate (WTI) crude gained

0.7% to $83.20 a barrel.

Gold edged 0.4% lower to $2,405 an ounce.

(Reporting by Dhara Ranasinghe in London and Raw Wee in

Singapore; Editing by Arun Koyyur)