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SINGAPORE, Apr 28 (Reuters) China's surprise interest rate hike spooked Asian markets and pushed them lower on Friday, offsetting U.S. Federal Reserve chief's hints of a possible end of U.S. rate increases.

Shares of Asian miners and exporters such as POSCO Co. Ltd. , the world's fifth-biggest steel maker, fell sharply after Beijing took steps to cool its fast-expanding economy.

In Japan, a rise in the yen pulled down exporters such as Honda Motor Co., while Sony Corp. plunged nearly 6 percent after a disappointing earnings forecast.

''Selling mounted as we've got the Golden Week holiday coming, in addition to concerns about a rise in Chinese interest rates and the currency market coming at the same time,'' said Yusuke Sakai, a manager of equities trading at Mizuho Securities.

The Nikkei fell 1.73 percent as shares of non-ferrous metal makers such as Sumitomo Metal Mining Co. Ltd. also slipped amid a decline in metal prices due to concerns about demand after China hiked rates.

Mitsubishi Corp., Nippon Steel Corp., NTT DoCoMo Inc., Toshiba Corp. and Matsushita Electric Industrial Co. Ltd. are among the companies set to announce their full year results and outlooks on Friday.

China's rate rise hammered South Korean stocks, which fell nearly 2.5 percent, but analysts said Beijing's move might not have an effect for long.

Shares of Hyundai Motor Co., the country's biggest auto maker, extended losses from the previous day after prosecutors sought to arrest its chairman on charges of misusing company funds. Hyundai is yet to release first-quarter earnings which were due out on Thursday.

South Korean technology shares fell too, with Samsung Electronics down more than 2.5 percent and LG Electronics 2 percent.

''The effects of the Chinese move are not going to last long,'' said Lee Woo-hyun, an analyst at Kyobo Securities. ''The fundamentals in the market are still positive, and the rising trend should resume, so this may be a one-day thing.'' Australian shares shed nearly 1 percent, easing for a second straight day, as miners such as BHP Billiton Ltd. fell on concerns that China's move would slow demand for metals.

Hong Kong shares fell 1.45 percent, while the Hong Kong-listed shares of mainland companies lost 2 percent.

On Wall Street, the Dow Jones industrial average rose 0.25 percent after Federal Reserve Chairman Ben Bernanke said the Fed might pause in its 22-month cycle of raising borrowing costs. The Nasdaq Composite Index gained 0.49 percent.

YEN UNDER PRESSURE, OIL SLIPS In the foreign exchange market, the yen inched down against the U.S. dollar despite a barrage of upbeat economic data that did little to alter expectations the Bank of Japan will raise interest rates later in the year.

The dollar stayed near a seven-month low versus the euro after Bernanke gave the clearest signal yet that the Fed's campaign of raising interest rates might be coming to an end.

In early Tokyo trade, the dollar was at 114.25 yen up slightly from 114.10 yen in late U.S. trade and from a three-month low of 113.83 yen hit on Thursday.

The euro was little changed at $1.2535 near a seven-month peak of $1.2549 hit the previous day following Bernanke's comments.

U.S. oil futures slipped below $71 a barrel after a four-day slump from a record high, with dealers focused on a U.N. Security Council meeting over Iran's nuclear plans and absorbing China's unexpected interest rate rise.

Frontmonth U.S. crude for June delivery was down 32 cents at $70.65 by 0227 GMT, deepening the previous day's 96 cent or 1.3 percent slump and taking the week's losses so far to 6 percent.

Gold held above $635 an ounce after volatile trade the previous day, when it had fallen sharply after China raised interest rates.

Spot gold rose to $635.80/636.80 an ounce from $634.20/635.20 late in New York on Thursday.

REUTERS CS PM0931