NEW YORK (Reuters) – A look at the day ahead in Asian markets from Stephen Culp, financial markets columnist.

Could this be a landmark day for the Bank of Japan?

Asian markets are likely to come under pressure on Friday, backing down from five-month highs as the Bank of Japan opens the door to allowing long-term interest rates to rise beyond the 0.5% cap as it discusses potential amendments its yield curve control (YCC) program.

A Nikkei report on Thursday pointing in that direction coincided with a downturn for U.S. stocks, a fall that snapped the Dow Jones Industrial Average’s 13-day winning streak, it’s longest since 1987.

The news was “the biggest driver of today’s performance,” according to Michael Green, portfolio manager and chief investment strategist at Simplify Asset Management.

It also prompted the dollar to fall against the yen.

The BoJ’s tentative step away from its ultra-loose monetary policy inches it closer inline with its global peers, which have tightened their monetary policies to combat inflation.

On Wednesday, the U.S. Federal Reserve implemented another 25 basis point interest rate hike as widely expected, and the European Central Bank followed suit on Thursday, even as central banks around the world have assumed a more cautious posture amid signs that inflation is in a cooling pattern.

Earlier in the day, U.S. stocks were buoyed and fears of a global economic slowdown were abated by upbeat earnings reports and a raft of better-than-expected U.S. economic data.

Topping that list was the U.S. Commerce Department’s robust initial take on second quarter GDP – coming in at 2.4%, blasting past the 1.8% consensus – supporting U.S. Federal Reserve Chairman Jerome Powell’s view that a the economy can achieve a so-called “soft landing.”

The Commerce Department is due to release its broad ranging and hotly anticipated Personal Consumption Expenditures (PCE) report on Friday, which will cover income, spending, and crucially, inflation.

Here are key developments that could provide more direction to markets on Friday:

– Japan is scheduled to issue its Tokyo CPI report

– Australia expected to post June retail sales, Q2 PPI

– South Korea is due to release industrial output and retail sales for June

(Reporting by Stephen Culp; Additional reporting by Carolina Mandl; Editing by Marguerita Choy)

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