* Ueda comments and tone in focus as BOJ keeps rates

steady

* Trump unhappy with latest Iranian proposal, official

says

* Big tech earnings to test strong AI rally in April

* Fed, ECB and BoE also to stand pat this week

(Updates after BOJ policy decision)

By Ankur Banerjee

SINGAPORE, April 28 (Reuters) - Stocks held their ground

on Tuesday as investors weighed the geopolitical tumult in the

Middle East, while the yen firmed after the Bank of Japan held

rates steady but the split voting underscored worries over

inflation because of the war.

The BOJ, in an expected move, held short-term rates steady

at 0.75% but three on the nine-member board proposed hiking

borrowing costs, signalling the central bank's concerns over

inflationary pressures from the Middle East conflict.

Markets will now focus on comments from Governor Kazuo Ueda

for clues on how the protracted Iran war affects the central

bank's rate-hike path.

The yen strengthened a touch to 159.21 per U.S.

dollar, but was near the 160 level that traders have been

worried about as a breach beyond it might spur Tokyo to step in

to support the currency.

The yen has been straddling 159 since mid-March. Japan's

Nikkei was down 0.5% after scaling a fresh peak in the

previous session.

"A close call for the BOJ," said Fred Neumann, chief Asia

economist at HSBC, noting the three dissenting votes highlight

the tensions monetary officials face, with Japan not alone in

facing the dilemma whether to tighten policy into an energy

price shock.

"Still, today's message from the Bank of Japan is that it

remains poised to tighten policy sooner than later."

MARKETS AWAIT CLARITY ON US-IRAN TALKS, HORMUZ

In geopolitics, the U.S. was reviewing Tehran's latest

proposal to resolve the war in the Middle East but a U.S.

official said President Donald Trump was unhappy with the

proposal because it did not address Iran's nuclear programme.

That leaves the two-month-long conflict in a stalemate with

energy and other supplies through the critical Strait of Hormuz

at a standstill, keeping oil prices well above $100 per barrel.

In stocks, MSCI's broadest index of Asia-Pacific shares

outside Japan was down 0.22%, hovering near the

record high it touched on Monday. The index is on course for a

17% rise in April after dropping 13.5% in March.

The S&P 500 eked out modest gains on Monday, poised

for about a 10% gain for the month. U.S. stock futures

were flat in Asian hours on Tuesday, while European futures

pointed to a higher open.

Global monetary policy will be in the spotlight this week,

with the U.S. Federal Reserve, the Bank of England and the

European Central Bank due to announce policy decisions after the

BOJ. All are expected to hold rates unchanged but attention will

be on comments from policymakers on pricing pressure.

The euro was steady at $1.1716, with the dollar

index, which measures the U.S. currency against six major

units, at 98.498.

The dollar benefited in March from safe-haven flows as war

in the Middle East erupted but shed most of those gains on hopes

of a peace deal this month. It has steadied in recent days after

U.S.-Iran talks stalled.

The war has also sent oil prices surging, fuelled inflation

and cast a shadow over the outlook for global growth, with the

closure of the Strait of Hormuz, which normally carries a fifth

of global oil and gas shipments, a key risk.

Brent crude futures edged up to $109.19 a barrel,

near a three-week high. U.S. West Texas Intermediate was

at $97.22. Oil prices are well above pre-war levels but have

pulled back from their peak on hopes for a peace deal.

Investors are also focusing this week on earnings from tech

giants Microsoft ( MSFT ), Alphabet, Amazon ( AMZN ),

Meta Platforms ( META ) and Apple ( AAPL ) that will be a test

for the blistering AI-driven rally in April.

Anthony Saglimbene, chief market strategist at Ameriprise,

said the earnings will provide the market with a real-time read

on whether AI investment is translating into commercial results.

"The divergence between equity market optimism and the more

cautious signals from bond and oil markets, however, reinforces

the view that geopolitical developments remain an active and

important variable in risk management," Saglimbene said.