Asian stocks were subdued on Wednesday, as investors stayed cautious ahead of U.S. and Japanese central bank policy decisions, while crude oil prices hovered near 2016 highs.
Japan's Nikkei lost 0.6 percent as Japan-based suppliers of iPhone parts fell after Apple Inc reported its first-ever decline in iPhone sales and its first revenue drop in over a decade overnight.
Taiwan stocks also fell, weighed down by a drop in shares of Apple suppliers.
But, MSCI's broadest index of Asia-Pacific shares outside Japan was little changed.
Australian shares gained 1 percent after weak local inflation data revived prospects for a rate cut there.
South Korea's Kospi shed 0.2 percent while Shanghai nudged up 0.4 percent.
While 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, it could also take a more upbeat view on the economy, keeping the way open for future 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 normalization."
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 CLc1 traded at $44.50 a barrel, not far from $44.83, the highest since early November scaled on Tuesday. Brent crude LCOc1 was at $46.28 at barrel after rising to a five-month peak of $46.49 overnight.
A big mover in the Asian currency market was the Australian dollar, which dropped sharply after first quarter inflation data showed prices fell for the first time since 2009, and core inflation rose more slowly than expected.
"The underlying rate of inflation has slowed considerably and Australia's CPI rates are finally starting to look more like its developed market peers. This won’t sway the RBA to lower the cash rate next Tuesday, but it will keep their easing bias in play for a while," said Jasmin Argyrou, Aberdeen Asset Management senior investment manager in Sydney.
The Aussie, which hit a 10-month high of $0.7836 last week on the back of higher commodity prices, was down 1.1 percent at $0.7664 AUD=D4.
The U.S. 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 $1.1304 EUR= after advancing 0.3 percent overnight.
The greenback slipped 0.1 percent to 111.15 yen JPY=, still 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 GBP=D4 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.