Updates prices throughout, adds new detail on BOJ

By Nell Mackenzie and Gregor Stuart Hunter

LONDON/SINGAPORE, July 31 (Reuters) - World stocks were mixed Thursday, with markets mulling a raft of economic indicators including central bank rate decisions, inflation data and last-minute trade deal negotiations ahead of U.S. President Donald Trump's August 1 deadline.

The most recent development came from the Bank of Japan, which held interest rates and increased its inflation forecast, casting cautious optimism on Japan's economic prospects.

Japan's shorter-dated bond yields at one point rose to their highest since early April, but walked that back after the BOJ's policy statement led market participants to push out expectations for any future interest rate hike.

The yen JPY=EBS also gave back early gains and was last steady on the day at 149.73 per U.S. dollar, while the Nikkei index .N225 closed up just over 1%.

Earnings were also top of mind for investors, and Nasdaq futures NQc1 gained 1.4% after better than expected results from Microsoft MSFT.O and Meta Platforms META.O. S&P 500 futures EScv1 advanced over 1%.

"Meta and Microsoft have just delivered the kind of earnings most companies can only dream of,” said Dan Coatsworth, investment analyst at AJ Bell.

"They’ve smashed market forecasts by a country mile and caused investors to scream with joy."

Earnings also underpinned stock indexes in Europe. The pan-European Stoxx 600 index .STOXX was steady around 1025 GMT.

The index is on track to end the month 1.6% higher as easing trade worries, better than expected U.S. and European economic data and largely upbeat earnings reports bolstered sentiment.

The region's banks .SX73 rose over 1.5% on Thursday after positive results from Standard Chartered .STAN.L and France's Societe Generale SOGN.PA.

But MSCI's broadest index of world shares .MIWD00000PUS was flat, weighed down by falls in Chinese stocks after official PMI gauges showed weaker than expected economic activity during July. China's blue chip CSI 300 ended 1.8% lower, its biggest single day drop since April 7, and Hong Kong's .HSI index closed 1.6% lower.

Investors in Asia also mulled the implications of a trade deal between the U.S. and South Korea as well as whether Trump's initial announcement of a 25% tariff for India should be taken seriously, especially as it was announced in the middle of trade negotiations.

Shares in India recovered earlier losses, with the benchmark Nifty 50 .NSEI just in positive territory.

The Korean won KRW=KFTC gained 0.3% after Trump said the U.S. would charge a 15% tariff on imports from South Korea, which would in return invest $350 billion in U.S. projects and purchase $100 billion in U.S. energy products.

The announcement is the latest in a series of trade deals rushed out before Friday's deadline to avert the imposition of Trump's April 2 "Liberation Day" tariffs.

Meanwhile, copper futures HGc1 plunged 19.4% after Trump said the U.S. would impose a 50% tariff on copper pipes and wiring, falling short of the expectation of sweeping restrictions.

ON HOLD

The Federal Reserve's rate-setting committee voted 9-2 on Wednesday to hold U.S. rates steady for the fifth consecutive meeting, with two Fed governors dissenting for the first time in more than three decades.

Fed Chair Jerome Powell's comments after the decision undercut confidence that borrowing costs would fall in September.

The dollar index =USD steadied at 98.718, knocked from the two-month high of 99.987 it touched on Wednesday. The index is set for a 3.1% gain for the month, its first in 2025. FRX/

"Although the Federal Reserve decided to keep rates steady at its recent rate setting decision, the chance of rate cuts at upcoming meetings remains live as they balance softening economic data with the potential for persistent inflation," said Manusha Samaraweera, fixed income investment director at Capital Group.

U.S. gross domestic product growth rebounded more than expected in the second quarter, but the details of the report painted a picture of an economy losing steam and plagued by uncertainty from Trump's protectionist trade policies.

Brent crude futures for September delivery LCOc1 were down 26 cents to $72.98 a barrel, while U.S. West Texas Intermediate crude for September CLc1 fell 25 cents to $69.75 a barrel as traders exited positions set to expire on Thursday.

Brent October crude futures LCOc2 also fell 33 cents to $72.13 amid reports that proposed EU tariffs on crude palm kernel and oil might be removed.

(Reporting by Nell Mackenzie and Gregor Stuart Hunter. Additional reporting by Ankur Banerjee. Editing by Jamie Freed and Mark Potter)

((Gregor.Hunter@thomsonreuters.com;))