* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* BOJ on hold, as expected; disappoints some who hoped for amove
* Fed cuts rates, but Powell's tone disappoints doves
* Oil futures drift higher as geopolitical risks remain
By Stanley White
TOKYO, Sept 19 (Reuters) - Asian shares extended declines onThursday after the U.S. Federal Reserve signalled a higher barto further easings, while the Bank of Japan also held off fromoffering more stimulus as some had hoped.
The Fed cut rates for the second time this year as globalgrowth risks intensified, forcing policymakers around the worldto step up efforts to stimulate their economies. Earlier in theday, the BOJ kept policy steady as expected, though there weresome expectations the Japanese central bank would ramp up itsalready massive stimulus.
Asian equities were already on the back foot after FedChairman Jerome Powell took a more guarded approach to anyfurther reductions in borrowing costs.
MSCI's broadest index of Asia-Pacific shares outside Japanfell 0.6%. Hong Kong shares shed 1.36%,but Japan's Nikkei rose 0.43%.
The pan-region Euro Stoxx 50 futures were down0.06%, German DAX futures off 0.1%, and FTSE futureslost 0.27%.
The yen rose from a seven-week low versus thedollar and jumped against the Australian dollar after the BOJ'sdecision.
Central banks around the world have been loosening policy tocounter the risks of low inflation and recession. Easiermonetary policy has generally supported equities.
However, some analysts argue that a bond market rally hasgone too far, saying yields have fallen too fast and curvesflattened too much. Others are worried about the growing amountof sovereign debt with negative yields.
"There were large yen-buying orders before the BOJ, and thatjust carried through," said Tohru Sasaki, head of Japan marketsresearch at J.P. Morgan Securities in Tokyo.
The BOJ maintained its pledge to guide short-term interestrates at minus 0.1% and the 10-year government bond yield around0%. While it signalled the chance of expanding stimulus as earlyas its next policy meeting in October, some speculators had betthe Fed's rate cut on Wednesday would nudge the BOJ into actionon Thursday.
The yen rose around 0.5% to 107.92 per dollar andgained around 1% to 73.26 versus the Australian dollar.
Investors will closely watch BOJ Governor Haruhiko Kuroda'spost-decision press conference later on Thursday to gaugewhether the central bank is likely to act before year-end.
U.S. stock futures fell 0.28% on Thursday. The S&P500 reversed losses to end 0.03% higher after Powell saidhe did not see an imminent recession or think the Fed will adoptnegative rates.
The Fed cut interest rates to 1.75%-2.00% in a 7-3 vote butsignalled further cuts are unlikely as the labour market remainsstrong.
The rate cut was widely expected, but the split vote hasraised some concern about predicting the future path of monetarypolicy.
So-called dot-plot forecasts from all 17 policymakers showedeven broader disagreement, with seven expecting a third rate cutthis year, five seeing the current rate cut as the last for2019, and five who appeared to have been against evenWednesday's move.
"This is a small positive for share prices as long as thereis no recession," said Shane Oliver, head of investment strategyand chief economist at AMP Capital Investors in Sydney.
"The only problem is a 25 basis-point cut was alreadyexpected, and the comments and dot-plot forecasts were not asdovish as the market hoped. I think the Fed will have to cutagain. There are still some risks from the yield curve."
The yield on benchmark 10-year Treasury noteserased gains and fell to 1.7822%, while the two-year yieldrose to 1.7563%.
The spread between two- and 10-year Treasury yields, the most commonly used measure of the yieldcurve, was near the lowest since Sept. 9.
The curve inverted on Aug. 14 for the first time since 2007when long-term yields traded below short-term yields, a widelyaccepted indicator of coming recession.
Elsewhere in the currency market, the Aussie fell 0.6% to$0.6790 after data showed the nation's jobless rate roseslightly to 5.3% in August, bolstering expectations for thecentral bank to cut rates.
U.S. crude futures rose 0.31% to $58.29 per barrel.Oil markets have stabilised after attacks in Saudi Arabia overthe weekend triggered a supply shock and sent prices soaring,but the volatility is still a risk as Middle East tensionsremain high.
Washington has blamed Iran for the attacks, a charge whichTehran denies. U.S. Secretary of State Mike Pompeo has said thestrike was "an act of war."
Sterling traded at 88.53 pence per euro, nearits strongest level since May 30. The pound was littlechanged at $1.2477.
Investors are awaiting a Bank of England policy meetinglater Thursday. The BOE is expected to keep rates unchanged, butuncertainty about how the UK will exit from the European Unionhas complicated the outlook for monetary policy.
(Editing by Sam Holmes & Shri Navaratnam)