* BOJ extends corporate funding support steps
* China foreign exchange reserves top $2 trillion
* Intel trumps forecasts, sees stronger demand in Asia
* Goldman Sachs profits surge
* Shares gain on U.S. earnings, yen steps back (For more on the global crisis, click)
By Hideyuki Sano
TOKYO, July 15 (Reuters) - The Bank of Japan voted on Wednesday to extend its emergency corporate funding support measures to avoid choking off a fragile economic recovery.
The move contrasted with China, where the central bank acted to gently pull back on the reins of the economy as foreign exchange reserves topped $2 trillion -- a sign of money flowing back into the country in anticipation of an improving economy.
Strong earnings from Intel Corp and Goldman Sachs lifted stock markets on hopes of a rebound in corporate profits, despite signs Western economies are not yet on a firm path to recovery from the deepest recession in decades.
"We have already seen a fair bit of buying into risk over the past few weeks and people are feeling a bit better about the economy," said Chris Kimber, client adviser at Bell Potter Securities in Australia.
The Bank of Japan's board voted unanimously to keep buying commercial paper and corporate bonds from banks, extending by three months the measures it introduced to deal with a crunch in credit markets that had been due to expire in September.
"The fact that it hasn't extended the measures for six months to cover the fiscal year-end suggests that the BOJ thinks the corporate funding situation is not deteriorating," said Kenro Kawano, strategist at Credit Suisse said.
The bank also kept keep interest rates at 0.10 percent and stuck to the main scenario it outlined in April of a slow return to moderate economic growth towards the end of the year.
Many hopes for a global revival have centred on China, where lavish government stimulus spending appears to be having the desired effect on an economy clobbered by a dramatic drop-off in trade as recession took hold in the developed world last year.
Annual growth in China's broad M2 measure of money supply surged in June on the back of breakneck bank lending ordered by Beijing to pump up the world's third-largest economy.
And in a sign that money is flowing back into China in anticipation that those stimulus efforts will succeed, the central bank's foreign exchange reserves leapt by $177.9 billion in the second quarter to $2.13 trillion.
Signalling its worry that rapid lending could fuel inflation, the central bank responded with the latest in a series of baby steps to absorb surplus cash washing through the economy by requiring banks to buy $15 billion in special bills.
"We think a gradual policy tightening in an early stage would be a positive move, especially in light of the expected very strong GDP growth in Q2 2009 and rapidly dissipating deflationary pressures," said Hong Kong-based Goldman Sachs economists Yu Song and Helen Qiao in a research note.
BEATING FORECASTS
Intel reported quarterly earnings of 18 cents a share, far exceeding forecasts of 8 cents a share, and also gave an outlook that blew past forecasts.
The chip maker said demand was especially strong in Asia, bolstering hopes the region would recover even as most Western economies struggle.
Asian tech shares jumped in response on Wednesday, with Samsung Electronics, the world's top maker of memory chips and flat screen TVs, rising more than 5 percent.
Goldman Sachs Group Inc, Wall Street's largest investment bank, reported profits rose by a third in the second quarter, far exceeding expectations as a one-time charge to repay government loans was offset by strong gain in trading.
"They're terrific numbers ... I think things are very fragile but they manage to make money in all environments, which is what you're supposed to do," said William Smith, chief executive of Smith Asset Management in New York.
The results showed an extraordinary turnaround from the near meltdown in the U.S. banking sector in the wake of the collapse of Lehman Brothers in September, which helped tip the economy into its deepest slump since the 1930s.
Economic data from Europe and the United States on Tuesday had been lacklustre.
U.S. June retail sales data came in better than expected, but analysts noted much of the 0.6 percent rise was driven by higher gasoline prices and the numbers overall suggested the recovery would only be sluggish.
In Germany, investors have turned more pessimistic than expected in July for the first time in nine months, a signal analysts say means the nation's economy will not start growing until next year at least.
"The German economy could be among the first to escape the recession. However, it is 'if' and not 'when,'" said Carsten Brzeski, ING Financial Markets economist. "Cautious optimism, not enthusiasm, is most suitable for the way forward."
Euro zone industrial production data also disappointed, growing only slightly in May after a bad April, and remaining 17 percent lower than it was a year earlier. (Writing by Alex Richardson; Editing by Kazunori Takada)