* 10-year JGB yields pull away from 1-1/2 year highs
* U.S. tech sell-off weighs on world stocks
* Fed and BOE rate meetings now in market focus
By Sujata Rao
LONDON, July 31 (Reuters) - Reassurance by the Bank of Japan that it will keep its super-easy monetary policies in place for an extended period pushed the yen and global bond yields lower on Tuesday, though mounting concerns about the tech sector kept world stocks under pressure.
A recent Reuters report that the BOJ could be debating scaling back its massive stimulus programme had sent Japanese bond yields to 1-1/2 year highs, spilling into euro zone and U.S. debt markets. That helped push yen more than 2 percent off six-month lows hit against the dollar in early July JPY=EBS .
But while the BOJ announced some tweaks to its equity purchase programme and said its stimulus plan would be more flexible, the changes did not show any inclination for radical shifts from its accommodative stance. response, yields on 10-year Japanese government bonds <JP10YT=RR fell 3 basis points, and 40-year yields slid nearly 9 basis points, pushing 10-year U.S. and German yields US10YT=RR down around 2-3 bps. BOJ is important in the sense of what they didn't do," said Andrew Milligan, head of global strategy at Aberdeen Standard Investments in Edinburgh.
"It was disappointing for some investors who thought they would be more hawkish in their approach and the market reaction, with lower yen and bond yields, shows that view which many people held, is mistaken."
The yen slipped around 0.2 percent JPY=EBS to trade around 111.2 yen. Many analysts now see it easing to around 113, especially if the U.S. Federal Reserve delivers a hawkish interest rate message when its policy meeting ends on Wednesday.
The dollar was flat against a basket of currencies .DXY but looks likely to snap a three-month streak of gains as markets have more or less priced in two more Fed rate hikes this year. The greenback had rallied more than 5 percent in the second 2018 quarter.
The BOJ decision failed to offer a significant boost to equities, however. Markets have been roiled by growing concerns about the global tech sector which had seemed relatively immune to trade tensions between the United States, Europe and China.
But lacklustre earnings from Netflix (NASDAQ:NFLX) and Facebook (NASDAQ:FB) have triggered losses across the tech sector with Wall Street's tech index shedding 6 percent in the past three sessions .SPLRCT .
That pushed world stocks to one-week lows .MIWD00000PUS and even Japan's Nikkei failed to hold on to earlier BOJ-fuelled gains, ending the day flat .N225 . MSCI's index of Asia-Pacific tech shares fell almost one percent .MIAP0IT00PUS .
European tech followed suit, losing 0.4 percent .SX8P and lagging broader equities that started the day flat .STOXX .
Wall Street was set for a modestly firmer open, futures signalled ESc1 .
The tech retreat has overshadowed a generally buoyant U.S. earnings season, with average 22.6 percent profit growth and 83 percent of companies beating consensus estimates so far. That included heavy equipment maker Caterpillar (NYSE:CAT), seen as a bellwether of global economic growth.
Milligan attributed the setback to a re-assessment of share prices and summer profit-taking rather than a fundamental loss of confidence in the sector. World stocks are still set to end July with the best monthly returns since January, despite trade tensions, growth fears and tech selling, he noted.
"The market is saying 'you are fairly valued around these prices so let's wait for the next big story'. That will either be on the downside with trade tensions in autumn or it could positive if Chinese stimulus turns out to be greater than expected," Milligan added.
He was referring to Beijing's announcements, offering more fiscal stimulus to counter the effect of U.S. trade tariffs and incentives for banks to lend to small business.
Markets now await Wednesday's Fed policy statement to see if the expected two rate hikes for the remainder of 2018 can be cemented in. In Britain, a 25 basis-point hike is now widely expected on Thursday, despite economic weakness linked to Britain's looming European Union exit.
The British pound has already priced the move, David Riley, chief investment strategist at BlueBay Asset Management, said, adding: "I think they will do it but it will be one and done."
The pound GBP= firmed 0.2 percent to around $1.3156, having drifted off 10-month troughs of $1.2955 touched earlier in July.
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https://reut.rs/2KeglfE World stocks set for best month since Jan
https://reut.rs/2K7PvFV
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