Jan 24 (Reuters) - A look at the day ahead in Asian

markets.

Investors divert their focus away from Washington on Friday for

the first time since President Donald Trump's inauguration on

Monday, towards Tokyo and the Bank of Japan, which is widely

expected to raise interest rates to a 17-year high of 0.5%.

Assuming the BOJ does raise rates by a quarter of a

percentage point - a 95% certainty, according to market pricing

- that focus will narrow in even more on Governor Kazuo Ueda's

press conference and the signals he sends about future policy

steps.

The ideal scenario for asset prices in Japan and beyond

would probably be a "dovish hike," with Ueda more inclined to

cool rather than fuel investor expectations about the pace of

further tightening, even though wage growth is gathering steam.

Japanese money markets are erring on the cautious side,

pricing in only another 25 bps of tightening this year after

Friday's expected increase.

Even if one sets aside the BOJ's historical scars and

institutional anxiety when it comes to raising rates, Ueda

himself has struck a measured tone in recent public remarks,

most notably on Dec. 25 and a week earlier in his press

conference after the BOJ kept rates on hold.

Calming the equity and bond market horses, however, is not

without risk - it may inject unwanted volatility into the

currency markets, pushing the yen back down towards the 160.00

per dollar area and the intervention danger zone.

Ueda's dovish stance after the BOJ's December meeting pushed

the yen down to 158 per dollar, the lowest since July. A weaker

exchange rate may give the Japanese stock market a lift, but the

yen is perilously close to all-time lows and finance minister

Katsunobu Kato and other officials have recently warned against

speculative selling.

Of course, a rapid appreciation of the yen isn't in anyone's

interest either. That is often associated with - and can trigger

- bouts of wider market turbulence. Japan is the world's largest

creditor with some $3.3 trillion of net foreign assets, and the

risk of Japanese repatriation flows quickly becoming a torrent

is one officials will be well attuned to.

While events in Japan top the agenda on Friday - Japan also

releases inflation figures - Trump is still making headlines,

insisting on Thursday that global interest rates and oil prices

come down. He also said he expected the Fed to listen to him and

that he would consider speaking to Fed Chair Jerome Powell about

the matter.

His comments took the wind out of the dollar and oil's

sails, and lifted the S&P 500 to a record closing high. They

also brought U.S. bond yields off their highs but concern over

the fiscal outlook continues to weigh heavily on Treasuries.

Here are key developments that could provide more direction

to markets on Friday:

- Japan interest rate decision

- Australia, India PMIs (January)

- Taiwan GDP (Q4)