* BOJ on hold, as expected; disappoints some who hoped for a move
* 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 on Thursday after the U.S. Federal Reserve signalled a higher bar to further easings, while the Bank of Japan also held off from offering more stimulus as some had hoped.
The Fed cut rates for the second time this year as global growth risks intensified, forcing policymakers around the world to step up efforts to stimulate their economies. Earlier in the day, the BOJ kept policy steady as expected, though there were some expectations the Japanese central bank would ramp up its already massive stimulus.
Asian equities were already on the back foot after Fed Chairman Jerome Powell took a more guarded approach to any further reductions in borrowing costs.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.6%. Hong Kong shares .HSI shed 1.36%, but Japan's Nikkei .N225 rose 0.43%.
The pan-region Euro Stoxx 50 futures STXEc1 were down 0.06%, German DAX futures FDXc1 off 0.1%, and FTSE futures FFIc1 lost 0.27%.
The yen JPY=EBS rose from a seven-week low versus the dollar and jumped against the Australian dollar after the BOJ's decision. AUDJPY=D3
Central banks around the world have been loosening policy to counter the risks of low inflation and recession. Easier monetary policy has generally supported equities.
However, some analysts argue that a bond market rally has gone too far, saying yields have fallen too fast and curves flattened too much. Others are worried about the growing amount of sovereign debt with negative yields.
"There were large yen-buying orders before the BOJ, and that just carried through," said Tohru Sasaki, head of Japan markets research at J.P. Morgan Securities in Tokyo.
The BOJ maintained its pledge to guide short-term interest rates at minus 0.1% and the 10-year government bond yield around 0%. While it signalled the chance of expanding stimulus as early as its next policy meeting in October, some speculators had bet the Fed's rate cut on Wednesday would nudge the BOJ into action on Thursday.
The yen JPY=EBS rose around 0.5% to 107.92 per dollar and gained around 1% to 73.26 versus the Australian dollar AUDJPY=D3 .
Investors will closely watch BOJ Governor Haruhiko Kuroda's post-decision press conference later on Thursday to gauge whether the central bank is likely to act before year-end.
U.S. stock futures ESc1 fell 0.28% on Thursday. The S&P 500 .SPX reversed losses to end 0.03% higher after Powell said he did not see an imminent recession or think the Fed will adopt negative rates.
The Fed cut interest rates to 1.75%-2.00% in a 7-3 vote but signalled further cuts are unlikely as the labour market remains strong. rate cut was widely expected, but the split vote has raised some concern about predicting the future path of monetary policy.
So-called dot-plot forecasts from all 17 policymakers showed even broader disagreement, with seven expecting a third rate cut this year, five seeing the current rate cut as the last for 2019, and five who appeared to have been against even Wednesday's move.
"This is a small positive for share prices as long as there is no recession," said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney.
"The only problem is a 25 basis-point cut was already expected, and the comments and dot-plot forecasts were not as dovish as the market hoped. I think the Fed will have to cut again. There are still some risks from the yield curve."
The yield on benchmark 10-year Treasury notes US10YT=RR erased gains and fell to 1.7822%, while the two-year yield US2YT=RR rose to 1.7563%.
The spread between two- and 10-year Treasury yields US2US10=TWEB , the most commonly used measure of the yield curve, was near the lowest since Sept. 9.
The curve inverted on Aug. 14 for the first time since 2007 when long-term yields traded below short-term yields, a widely accepted 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 rose slightly to 5.3% in August, bolstering expectations for the central bank to cut rates.
U.S. crude futures CLc1 rose 0.31% to $58.29 per barrel. Oil markets have stabilised after attacks in Saudi Arabia over the weekend triggered a supply shock and sent prices soaring, but the volatility is still a risk as Middle East tensions remain high.
Washington has blamed Iran for the attacks, a charge which Tehran denies. U.S. Secretary of State Mike Pompeo has said the strike was "an act of war."
Sterling EURGBP=D3 traded at 88.53 pence per euro, near its strongest level since May 30. The pound GBP=D3 was little changed at $1.2477.
Investors are awaiting a Bank of England policy meeting later Thursday. The BOE is expected to keep rates unchanged, but uncertainty about how the UK will exit from the European Union has complicated the outlook for monetary policy.