San Francisco Frontiers - Global stocks mixed as yen falls despite Bank of Japan rate hike

Wall Street stocks experienced a meandering day, with the Dow finishing modestly lower while the Nasdaq edged higher. Earlier, European bourses retreated.

While interest rate hikes are normally a headwind for equities, investors greeted the Federal Reserve's decision Wednesday to lift rates as a sign it is serious about countering inflation, analysts said.

"We have some relief that the Fed credibility is still in place but at the same time, that doesn't necessarily change the fact that yields continue to move higher at elevated levels and there is still a lot of geopolitical uncertainty," said Angelo Kourkafas of Edward Jones.

Those higher yields also act as incentive for investors to steer more funds towards bonds, said Cresset Capital Management's Jack Ablin.

"Right now we're sort of an edge because bond yields are offering a competitive rate against stocks," said Ablin, who described investors as fairly clear on where the Fed stands.

"There's a sense another rate or two are coming and then investors believe it will be finished," he said. "Investors are looking through the short-term rate hikes."

But markets were more decisively negative in Europe, where Frankfurt, London and Paris all lost around 1.5 percent.

The Bank of Japan raised interest rates to a three-decade high, but the yen sank against the dollar on fears the pace of hikes might be slower than expected.

The 25-basis-point hike to 1.25 percent was expected by markets following the recent tightening by the European Central Bank and the US Federal Reserve, though the decision was not unanimous as it was carried by a 7-2 majority vote.

Pressure has increased on officials to further tighten monetary policy as a spike in oil prices caused by the Middle East crisis -- which shows little sign of ending anytime soon -- is expected to keep putting upward pressure on inflation.

"For a market looking for evidence that the BoJ could shorten the distance between hikes, those dissents mattered," said Stephen Innes at Quintex Intel.

Oil prices pulled back on hopes that Saudi Arabia was moving to restore about half of crude shipments within days after they were disrupted by the stoppage of its East-West pipeline to the Red Sea, before paring losses. Yet both major crude contracts remain above $100 a barrel.

Among individual companies, Nike fell 2.3 percent after French star football player Kylian Mbappe signed with Swiss sportswear brand On, ending a long association with the US brand that stretched back to the start of his career.

- Key figures at around 2015 GMT -

New York - Dow: DOWN 0.2 percent at 51,682.64 (close)

New York - S&P 500: UP 0.2 percent at 7,650.50 (close)

New York - Nasdaq Composite: UP 0.4 percent at 26,522.56 (close)

London - FTSE 100: DOWN 1.5 percent at 10,659.13 (close)

Paris - CAC 40: DOWN 1.5 percent at 8,065.02 (close)

Frankfurt - DAX: DOWN 1.6 percent at 25,304.06 (close)

Tokyo - Nikkei 225: UP 1.4 percent at 65,018.95 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 24,750.78 (close)

Shanghai - Composite: UP 0.9 percent at 3,911.87 (close)

Dollar/yen: UP at 156.73 yen from 155.97 yen on Thursday

Euro/dollar: UP at $1.1487 from $1.1476

Pound/dollar: UP at $1.3395 from $1.3359

Euro/pound: DOWN at 85.76 pence from 85.90 pence

West Texas Intermediate: DOWN 1.6 percent at $100.30 per barrel

Brent North Sea Crude: DOWN 0.9 percent at $103.87 per barrel

F.Garcia--SFF