(Updates levels throughout, adds U.S., FTSE futures)
* 10-year JGB yields pull away from 1-1/2 year highs
* Dollar gives up losses against the yen after BOJ meeting
* Asian stock markets subdued on global tech sell-off
By Swati Pandey
SYDNEY, July 31 (Reuters) - Global bond prices gained and the yen fell on Tuesday after the Bank of Japan (BoJ) wrongfooted hawks as it pledged to keep interest rates extremely low for an extended period.
The lead for European and U.S. shares was mixed with FTSE futures down a tad while E-Minis for the S&P500 gained 0.2 percent.
BOJ's policy announcement to make its massive stimulus programme more flexible provided some comfort to bond investors, as the policy tweaks didn't appear to show any inclination from the central bank make a radical shift from its accommodative stance.
In response, yields on 10-year Japanese government bonds (JGBs) fell 3 basis points to pull away from a 1-1/2 year high of 0.11 percent while those on 40-year bonds slid nearly 9 basis points. The move in JGBs pushed 10-year Treasury yields lower too.
German and French 10-year bond yields also slipped 3-4 basis points after BoJ decision. German bund futures opened 47 ticks higher on Tuesday.
However, the reaction in currencies was muted as some market participants awaited further clarity.
The dollar reversed losses against the yen and was last up 0.2 percent at 111.29. Against a basket of major currencies, the greenback was slightly firmer at 94.371.
"At this point, it's very unclear what the BoJ means by allowing long-term rates to go up and down. That is as vague as it can be," said Rodrigo Catril, senior forex analyst at National Australia Bank.
"The proof will be in how they react in the open market operations. It will be interesting to see how they allow 10-year JGB rates to increase. That will set a tone for the market."
With Japanese monetary policy still seen stimulatory, the dollar will likely climb to 112.50 yen in the short-term and could challenge the 113-yen barrier, according to Nick Twidale, Sydney-based analyst at Rakuten Securities Australia.
Elsewhere, Asian share markets pared some of their early losses as easy monetary policy is seen as positive for risk assets although a global rout in technology shares put a lid on gains.
Japan's Nikkei ended almost flat, after falling more than 0.5 percent earlier in the day. South Korea's Kospi index added 0.1 after spending most of the day in the red.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 percent. Chinese shares were mixed with Shanghai's SSE Composite up a touch while the blue-chip CSI300 off 0.2 percent.
Investors will next turn their attention to other central bank decisions this week. The U.S. Federal Reserve concludes its policy meeting on Wednesday and the Bank of England is seen raising interest rates on Thursday.
The British pound held at $1.3126, drifting higher from a more than 10-month trough of $1.2955 touched earlier in July.
In commodities, U.S. crude fell 35 cents to $69.78 a barrel after a sharp rally overnight while Brent fell 36 cents to $74.61.
Spot gold was flat at $1,221.03 an ounce.
Editing by Sam Holmes & Shri Navaratnam