Investors stayed cautious before central bank decisions from the
Bank of Japan and then the Federal Reserve later in the session, as
well as key U.S. jobs data on Friday.
MSCI's broadest index of Asia-Pacific shares outside Japan
<.MIAPJ0000PUS> added 0.1 percent in early trading, while Japan's
Nikkei stock average <.N225> rose 0.8 percent after Tokyo markets
were closed for a holiday on Tuesday.
U.S. equities got a lift on Tuesday from earnings results from
companies including Merck & Co, and a rebound in Facebook and other
high-growth shares. <.N>
Later on Wednesday, Fed officials are expected to decide unanimously
at the conclusion of their two-day meeting to continue tapering the
central bank's massive bond-buying stimulus. Investors will focus on
what their statement implies about the monetary policy outlook.
"For the most part we expect the statement to remain virtually
unchanged. Having just shifted to qualitative guidance in March, the
central bank is not planning to make any significant alterations in
the near future," said Kathy Lien, managing director of FX strategy
at BK Asset Management.
"Expectations for steady taper explain the dollar's muted reaction
to positive and negative data," she said in a note to clients.
Against the greenback, the euro steadied at $1.3812 after losing 0.3
percent on Tuesday. Against its Japanese counterpart, the euro
inched down to 141.66, after shedding 0.2 percent the previous day.
Preliminary German data showed annual inflation was a
softer-than-expected 1.1 percent in April. European policymakers are
concerned about the risk of deflation, with euro zone prices rising
around 0.5 percent, well below the European Central Bank's
medium-term target of just below 2 percent.
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The latest price report due later on Wednesday is expected to show
euro zone inflation picking up to a still-low 0.8 percent in April.
The dollar was slightly lower against the yen at 102.57, but
remained in sight of a three-week high of 102.79 yen hit on Tuesday.
Against a basket of currencies, the dollar <.DXY> edged down to
The BOJ is expected to unanimously stand pat on policy, and will
also release new economic projections following its meeting. Japan's
central bank policymakers will likely keep their inflation forecast
for fiscal 2015 roughly unchanged from the current 1.9 percent, and
estimate fiscal 2016 inflation close to 2 percent, sources have told
In commodities trading, spot gold was steady on the day at $1,295.80
an ounce. U.S. crude slipped 0.7 percent to $100.58 per barrel.
(Editing by Chris Gallagher)
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