A look at the day ahead in European and global markets from

Stella Qiu

The big mover in Asia was a 0.5% rise in the yen as Bank of

Japan Governor Kazuo Ueda disappointed some by saying the

central bank still plans to raise interest rates if the economy

and inflation turn out as forecast.

Fair enough. The market crash that prompted policymakers to

turn dovish three weeks ago is in the rear view mirror. In some

modest reaction to Ueda's comments, the Nikkei oscillated

between gains and losses but was last up 0.4%, and domestic

yields rose 2 basis points.

Supporting the governor's view is inflation data out earlier

in the day that showed Japan's core inflation accelerated for a

third straight month to 2.7% in July.

The "core core" index, which excludes food and energy

costs, dipped to 1.9%, but that is still around the BOJ's target

of 2%.

Traders still ascribe a very low chance of a hike in

October, but a move in December is now priced at 70%.

Elsewhere, sentiment turned cautious ahead of the Federal

Reserve Chair Jerome Powell's speech in Jackson Hole. Every

major stock market fell, driven by a pullback in technology

shares, although Wall Street futures were up slightly.

Europe is set for a mixed open, with EUROSTOXX 50 futures

down 0.2% and FTSE futures up 0.2% amid little

top-tier data for the region.

Powell's address could move markets significantly, or turn

out to be over-hyped. After all, his colleagues on Thursday

already alluded to a rate cut in September, voicing support for

a "slow and methodical" approach.

Taken together with surveys showing the U.S. economy still

growing at a healthy pace, markets slightly pared back the

chance of an outsized half-point cut in September to 24%, from

38% a day earlier.

A quarter-point cut is fully priced in.

Regardless of the size of the reduction, Democrats will be

happy to see the Fed finally kick-starting its easing cycle

before the presidential election in November .

Vice President Kamala Harris just formally accepted her

party's nomination on the last day of the Democratic National

Convention.

Key developments that could influence markets on Friday:

-- Sweden unemployment rate for July

-- Canada retail sales for June

-- U.S. new home sales

-- Fed Chair Jerome Powell's speech in Jackson Hole