Asian stocks inched up on Wednesday, reflecting hopes that upcoming U.S. and Japanese central bank policy meetings could benefit risk assets, while crude oil prices hovered near 2016 highs.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 percent.
Japan’s Nikkei added 0.2 percent in early trade and Australian shares nudged up 0.1 percent.
In a move some in the equity markets may welcome, the U.S. Federal Reserve is expected to hold interest rates steady later in the day when the two-day Federal Open Market Committee (FOMC) meeting ends. But the Fed could also take a more upbeat view on its economic outlook, leaving the path open for future interest rate rises.
“The main event tonight is the FOMC decision and the question of how much they acknowledge the clearly better global environment,” wrote Sam Tuck, senior FX strategist at ANZ.
“With volatility back to more normal levels, equities again pushing their highs, (European Central Bank President Mario) Draghi indicating they need time to assess existing policy, and Chinese and Asian data showing some signs of picking up, the door is open for the Fed to again signal gradual normalisation.”
The Bank of Japan makes its policy decision on Thursday amid some speculation it could ramp up its already extensive monetary stimulus scheme, which includes negative interest rates on some deposits at the BOJ.
In commodities, U.S. crude oil hovered near a five-month high hit overnight thanks to a gasoline market rally and data showing a surprise draw in U.S. crude stockpiles.
U.S. crude traded at $44.52 a barrel, not far from $44.83, the highest since early November scaled on Tuesday.
The dollar wobbled against the euro after being hit by Tuesday’s weaker than expected U.S. durable goods orders data.
The euro was steady at $1.1297 after advancing 0.3 percent overnight.
The greenback was little changed at 111.315 yen, in striking distance of a three-week high of 111.900 reached Monday on expectations of further BOJ easing this week.
Sterling was near a 12-week high of $1.4640 probed overnight as investors bet more heavily that Britons would vote in a June referendum to stay in the European Union, following an intervention from U.S. President Barack Obama on the side of the “In” campaign.