Global stock markets rose Friday, after U.S. President Donald Trump's latest comments were seen as taking a softer stance towards tariffs against China and raised the prospect of lower U.S. interest rates.

The yen, meanwhile, firmed after the Bank of Japan delivered a widely-expected rate hike.

'POWER OVER CHINA'

Trump told business leaders at the World Economic Forum in Davos, Switzerland, on Thursday that he wanted to lower global oil prices, interest rates and taxes.

In an interview with Fox News on Thursday evening, Trump said his recent conversation with President Xi Jinping was friendly and he thought he could reach a trade deal with China.

"But we have one very big power over China, and that's tariffs, and they don't want them, and I'd rather not have to use it, but it's a tremendous power over China," he said.

Those comments sent China's CSI300 blue chip index up 0.8% and Hong Kong's Hang Seng index 2% higher. The Australian and New Zealand dollars, as well as the yuan, also rose.

At 0935 GMT, the MSCI World Equity index was up 0.3% on the day.

European stocks also edged higher during early trading, helped by personal goods stocks as well as Trump's comments, with the STOXX 600 up 0.3%, Germany's DAX up 0.4% and France's CAC 40 up 0.9% on the day.

Euro zone businesses saw a modest return to growth at the start of the new year, PMI data showed.

JAPAN RATE HIKE

The BOJ raised interest rates to their highest since the 2008 global financial crisis, with attention now shifting to any clues from BOJ Governor Kazuo Ueda in his briefing on the pace and timing of further increases.

The yen strengthened to 154.86 per dollar in volatile trading, just shy of the one-month high of 154.78 it touched earlier this week.

"The hike may have been expected but, in what feels like the first time in a very long time, there were no major downgrades to their economic outlook," said Matt Simpson, a senior market analyst at City Index.

"This keeps the door open to another 25 basis point hike by the year-end, and rates to sit at a whopping 0.75%."

Trump's comments on wanting lower interest rates on Thursday moved U.S. markets, with the S&P 500 hitting a record high, although investors remained cautious about the president's next moves on trade and tariffs.

"No politician advocates for higher rates and he has always put himself out there as a low rates guy," said Prashant Newnaha, a senior Asia-Pacific rates strategist at TD Securities. "Expect the president to become more vocal and critical of the Fed."

Treasury yields have been on the rise as bond investors brace for eventual tariffs that may stoke inflation. The U.S. 10-year Treasury yield was at 4.6398% in European trading hours, below last week's 14-month high of 4.809%.

Euro zone government bond yields edged higher, with the German benchmark 10-year yield at 2.549%.

CURRENCIES HESTITANT

The European Central Bank and the Federal Reserve are due to meet next week as policymakers digest early moves of the Trump administration.

Currency markets in general have been tentative after a volatile few sessions since Trump's return to the White House, driven by his pronouncements on tariffs.

The U.S. dollar index was at 107.47, down around 0.6% on the day and set for a 1.8% weekly loss - its biggest weekly loss in two months.

Oil prices remained well below $80 a barrel, under pressure after Trump said he would be asking Saudi Arabia and OPEC to bring down oil prices.

Brent crude futures were a touch higher at $78.54 a barrel. U.S. West Texas Intermediate crude (WTI) was at $74.83.