Updated prices at around 11:27 a.m ET/ 1527 GMT

By Sinéad Carew and Tom Wilson

NEW YORK/LONDON, July 31 (Reuters) -MSCI'S global equities index ralliedon Wednesday while the yen jumped afterthe Bank of Japan raised interest rates and investors waited for a U.S. interest rate decision from the Federal Reserve.

The Fed is expected to end its meeting later on Wednesday leaving rates unchanged , but also indicating that a reduction in borrowing costs could come as soon as September. It has kept its policy rate in the 5.25%-5.50% range for the past year.

The yen hit a four-month high against the dollar after Japan's central bank indicated that more hikes may follow and unveiled a detailed plan to slow its massive bond buying. The hike put its short-term rateat 0.25%, a level unseen since 2008.

In U.S. Treasuries, yields were mostly lower after economic data indicated a slowing in the labor market and wage growth cemented expectations for a rate cut signal from the Fed.

Investors - jittery about an AI frenzy that has led to soaring tech valuations -were alsodigesting contrasting Microsoft and chipmaker AMD results.

AMD soared 7% after it increased its 2024 forecast for artificial-intelligence-chip sales. That in turned boosted chip stocks from Nvidia NVDA.O, up 10% to Intel INTC.O.

"We're seeing a nice bounce this morning. A lot of it is being driven by tech," said Emily Roland, Co-Chief Investment Strategist at John Hancock Investment Management.

'LIKE THE OLYMPICS'

For tech strength, Roland pointed to earnings commentary as well as a report that a Biden administration plan restricting exports of chip manufacturing equipment to China would exclude shipments from allies that export key chip making equipment - including Japan, the Netherlands and South Korea.

"Today is like the Olympics for the market. Because we're getting so much data not only from a macro perspective, central bank moves, we're also getting earnings reports. So there's a lot of different things being thrown at us and then we'll find out later the language the Fed decides to use and what impact that might have on risk assets," said Roland.

On Wall Street at around 11:27 a.m. the Dow Jones Industrial Average .DJI rose 228.32 points, or 0.55%, to 40,971.65, the S&P 500 .SPX gained 91.78 points, or 1.69%, to 5,528.22 and the Nasdaq Composite .IXIC gained 429.62 points, or 2.53%, to 17,581.77.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 13.34 points, or 1.66%, to 814.74. Europe's STOXX 600 .STOXX index rose 0.79% to 518.14.

In currencies , while the dollar was broadly lower before the Fed meeting the yen was the biggest mover after the BoJ news.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.28% to 104.16, with the euro EUR= up 0.06% at $1.0821.

Against the Japanese yen JPY=, the dollar weakened 1.45% to 150.55.

"A lot of market participants were preparing for this as if it was a possibility, but very few actually expected the BOJ to raise more than 10 basis points," said Helen Given, FX trader at Monex USA in Washington.

"This upside surprise is giving the yen a huge boost, especially because people think that the Fed might start telegraphing this afternoon for a cut in September," Given said.

Sterling GBP= strengthened 0.06% to $1.2842 as investors awaited the Bank of England's interest rate decision due on Thursday, with some uncertainty as policymakers have not spoken publicly for more than two months due to Britain's election.

In bonds, the yield on benchmark U.S. 10-year notes US10YT=RR fell 3.6 basis points from 4.141% late on Tuesday.

The 30-year bond US30YT=RR yield fell 4.8 basis points to 4.3508%. The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations, fell 0.5 basis points to 4.3543%, from 4.359% late on Tuesday.

In energy,oil prices rallied fromseven-week lows on escalating tension in the Middle East after Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in the Iranian capital Tehran. The assassination drew threats of revenge against Israel in a region already shaken by the war in Gaza and a deepening conflict in Lebanon.O/R

U.S. crude CLc1 gained 3.1% to $77.05 a barrel and Brent LCOc1 rose to $80.53 per barrel, up 2.42% on the day.

Gold prices were advancing on the day and were on track to register their biggest monthly percentage gain since March, led by geopolitical concerns and hopes of an interest rate cut in September as focus shifted to the U.S. Federal Reserve's upcoming policy decision.

Spot gold XAU= added 0.53% to $2,421.13 an ounce. U.S. gold futures GCc1 gained 0.67% to $2,421.20 an ounce.

Reporting by Sinéad Carew in New York, Tom Wilson in London, additional reporting by Harry Robertson in London and Ankur Banerjee in Singapore; Editing by Clarence Fernandez, Mark Potter, Toby Chopra and Gareth Jones

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