Asian shares rise on bets Fed may stay cautious

TOKYO (Reuters) - Asian shares got a boost on Tuesday from Wall Street's rise, as investors positioned for the possibility that weaker-than-expected U.S. data will prompt the Federal Reserve to adopt a cautious stance this week.

Crude oil remained under pressure from a global supply glut, after U.S. crude lost as much as 4 percent in the previous session to hit a six-year low. It was last down about 0.1 percent at $43.85 a barrel.

The Federal Open Market Committee is scheduled to begin its two-day policy meeting later on Tuesday, and many analysts had expected the central bank to drop the word "patient" from its formal statement on the timing of its first interest rate increase since 2006. Economists polled by Reuters split almost evenly on whether a rate increase will come in June or later in the year.

But downbeat data on U.S. manufacturing, industrial output and housing on Monday offered the Fed a reason to toe a cautious line on policy.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was up 0.8 percent in early trading, after all three major U.S. stock indexes posted gains of over 1 percent on Monday. The dollar's recent rally paused overnight, which reassured investors who had worried that the greenback's recent rally would erode companies' overseas earnings.

Japan's Nikkei stock average <.N225> was up 0.8 percent, marking a fresh 15-year intraday high, ahead of a Bank of Japan policy decision later in the session.

The BOJ is widely expected to maintain its aggressive easing program aimed at spurring sustainable growth and inflation of 2 percent.

It is also expected to maintain its view that continued improvements in the economy will prompt companies to raise wages and capital expenditure, which should help inflation move towards the 2 percent goal in the fiscal year beginning next month.

"There should be no expectation of any policy tweaks yet (there) still could be a knee-jerk dip in USD/JPY on BOJ insistence that current policy is on track to see inflation rise to the 2 percent target," Sean Callow, senior currency strategist at Westpac in Sydney, wrote in a note to clients.

Against its Japanese counterpart, the dollar was slightly higher on the day at 121.38 , not far from a nearly eight-year high of 122.04 logged one week ago.

The euro was nearly flat on the day at $1.0568 , well off Monday's 12-year low of $1.0457.

(Editing by Shri Navaratnam)

WhatsAppFacebookTwitterLinkedinBeloudBluesky