* US and European stocks extend rallies
* ECB keeps rates at 4%, press conference at 1345 GMT
* Bank of Japan chatter and Japanese data send yen soaring
* Gold shines at record high, Bitcoin takes a breather Graphic: World FX rates http://tmsnrt.rs/2egbfVh
LONDON, March 7 (Reuters) -
European and U.S. shares extended rallies on Thursday, and benchmark bond yields fell after the European Central Bank held interest rates steady and Fed Chair Jerome Powell said that easing was likely in 2024, if inflation behaved.
The yen surged and stocks in Tokyo fell overnight, with market adjustments before Friday's crucial February payrolls report.
While the ECB left its policy rate at a record high, it took a first, small step towards lowering it, saying inflation was easing faster than it anticipated only a few months ago.
That sent the pan-European STOXX 600 to a record high, up 1.09%, while Europe's broad FTSEurofirst 300 index rose 22.04 points, or 1.11%.
Powell on Wednesday testified
before the House Financial Services Committee that rate reductions will "likely be appropriate" this year "if the economy evolves broadly as expected" and once officials gain more confidence in inflation's steady decline. He repeated those comments before the Senate Banking Committee on Thursday.
"There was nothing particularly surprising within Fed Chair Powell's prepared monetary policy testimony to Congress," said James Knightley, chief international economist at ING.
"More data is required, but with more evidence of a cooling jobs market we still think they can cut rates from June."
On Wall Street stocks opened higher, on track to continue their record run.
The Dow Jones Industrial Average rose 236.19 points, or 0.61%, to 38,898.02. The S&P 500 gained 49.38 points, or 0.97%, at 5,154.26 and the Nasdaq Composite advanced 192.96 points, or 1.20%, to 16,224.01.
MSCI's gauge of stocks across the globe rose 6.77 points, or 0.88%, to 772.65.
"It's never been a bad thing to have synchronized global central bank policy. By that I mean the ECB is on a similar trajectory as the Federal Reserve is," said Art Hogan, chief market strategist at B Riley Wealth in New York.
Such coordinated action would stabilize currencies, he said.
The dollar was heading toward its biggest fall since late December against the yen which rose on data showing Japanese workers' nominal pay surged in January, after the country's major employment union won big pay hikes in 2024 wage talks.
BOJ board member Junko Nakagawa signaled her conviction that conditions for phasing out negative rates were now falling into place.
Against the Japanese yen, the dollar weakened 0.84% at 148.12. The rise in the yen weighed on Japan's Nikkei , which fell 492.07 points, or 1.23%, to 39,598.71.
The dollar index fell 0.34% at 102.99, with the euro up 0.24% at $1.0923.
In cryptocurrencies, bitcoin gained 1.23% at $67,286.00, hovering under Tuesday's record high above $69,000. Ethereum declined 0.35% at $3837.2.
The 10-year Treasury note yield continued a week-long slide to its
lowest in about a month
before steadying. It was up 0.6 basis point to 4.11%, from 4.104% late on Wednesday.
That followed a similar drop in German Bund yields.
Gold prices
hit an all-time high
on Thursday as Powell's comments fostered expectations for lower U.S. interest rates this year, which would make zero-yield gold more attractive to investors.
Spot gold rose 0.34% to $2,155.53 an ounce. U.S. gold futures fell 0.01% to $2,150.10 an ounce.
Oil prices slipped
on speculation that U.S. rate cuts could be delayed, though upbeat Chinese trade data augured well for demand in the world's top oil importer.
U.S. crude lost 0.87% to $78.44 a barrel and Brent fell to $82.55 per barrel, down 0.52% to on the day.
(Reporting by Marc Jones and Alden Bentley; Editing by Hugh Lawson and Richard Chang)
