SINGAPORE, July 12 (Reuters) - The yen swung between

losses and gains on Friday in volatile trade, reflecting

investors' skittishness after Tokyo was thought to have

intervened to prop up the Japanese currency in the wake of a

cooler-than-expected U.S. inflation report.

Moves in the yen against the dollar and other major

currencies stole the spotlight on Friday, though in the broader

market, Asian stocks cheered the growing bets for a September

rate cut from the Federal Reserve.

The dollar was last 0.05% lower at 158.79 yen,

after having risen more than 0.3% to an intraday high of 159.45

yen and falling 0.7% to a low of 157.75 yen within the span of

the early Asian session on Friday.

Moves were similarly choppy in the other yen crosses, with

the euro last up 0.02% against the yen while sterling

rose 0.1%, both reversing earlier losses against the

Japanese currency.

"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."

Speculation was rife that Japanese authorities had likely

intervened in the currency market to shore up the yen on

Thursday, after it surged nearly 3% against the dollar intraday.

Local media attributed the move to a round of official

buying from Tokyo to prop up a currency that has languished at

38-year lows, though authorities as usual remained reticent on

providing any hints.

The Nikkei newspaper reported that the BOJ conducted rate

checks with banks on the euro against the yen on Friday, citing

several sources.

ON TRACK

Elsewhere, MSCI's broadest index of Asia-Pacific shares

outside Japan was little changed, though was on

track for a 1.6% increase for the week, helped by growing bets

of imminent U.S. rate cuts.

Those expectations were reinforced after Thursday's U.S.

consumer price figures and as Fed officials showed increasing

confidence that inflation was coming to heel.

Market pricing now shows an over 90% chance of a Fed easing

cycle beginning in September, as compared to just over a 50%

chance a month ago, according to the CME FedWatch tool.

"While the timing of eventual Fed rate cuts will depend on

incoming data, this report, together with some softening in the

labor market, has further tilted the balance of evidence towards

an earlier start time," said David Doyle, head of economics at

Macquarie.

However, Asian stocks failed to rally on Friday as they

tracked a negative lead from Wall Street, after investors

rotated into smaller companies following the U.S. inflation

print.

"The broad move was driven by rotation and switching across

styles and factors," said Chris Weston, head of research at

Pepperstone. "It was the well-loved names that saw the selling

and maybe this was partly technical given just how extended

these plays are."

Japan's Nikkei similarly fell 2.3%, dragged down by

technology stocks.

S&P 500 futures were little changed, while Nasdaq

futures fell 0.02% and EUROSTOXX 50 futures were

flat.

In other currencies, sterling eased 0.03% to

$1.29095, though hovered near a roughly one-year high hit on

Thursday, as comments from Bank of England policymakers and

better-than-forecast GDP data led traders to reduce bets on an

August rate cut in Britain.

The euro gained 0.04% to $1.0871, while the U.S.

dollar was on the defensive and languished near a one-month low

against a basket of currencies from the previous session.

Oil prices meanwhile rose in early Asian trading hours on

Friday as signs of strong summer demand and easing inflationary

pressures in the United States bolstered investor confidence.

Brent futures rose 0.4% to $85.74 per barrel, while

U.S. West Texas Intermediate (WTI) crude gained 0.56% to

$83.08 a barrel.

Gold edged 0.07% lower to $2,413 an ounce.

(Editing by Christian Schmollinger)