Asian shares rose modestly on Tuesday, with technology stocks nosing ahead, while the dollar held its ground ahead of a Federal Reserve policy meeting expected to reiterate a pledge to keep rates low for a long time.
The MSCI index of Asian shares excluding Japan rose 0.3 percent after retreating almost 1 percent on Monday and backing off a seven-week high last week.
Sentiment was cautious as investors keep an eye on China for signs of potential policy tightening and wait to see if the Fed will repeat its regular pledge to keep rates low for an extended period.
The outcome of the Fed meeting is due to be announced at 2:15 p.m. EDT on Tuesday. No rate change is expected.
We believe that the 'low-for-long' wording will be left unchanged, JP Morgan said in a morning report. Such an outcome could suppress the market expectation for the Fed's early hikes and exert pressure on the U.S. dollar.
* Tokyo's benchmark Nikkei index rose 0.2 percent to inch back toward a seven-week intraday high set on Monday, although gains were limited by profit-taking in shares such as Honda Motor <7267.T>. The market is also waiting to see if the Bank of Japan eases policy on Wednesday, although analysts say the market has probably priced in such a move.
* Seoul shares rose 0.1 percent <.KS11>. Hynix Semiconductor <000660.KS> traded up 1.3 percent after news that leading shareholders of the world's No.2 chipmaker raised more than $800 million in a block sale of a 6.7 percent stake.
* Australian stocks <.AXJO> edged up 0.2 percent, as miners proved resilient to concerns that China might tighten monetary policy further to prevent overheating following higher than forecast inflation figures last week.
* Top miners such as BHP Billiton
* Hong Kong shares <.HSI> firmed 0.3 percent while Shanghai <.SSEC> stocks gained 0.3 percent after ending at a five-week low on Monday on expectations of policy tightening.
* Chinese oil company PetroChina <0857.HK> advanced 0.3 percent, with financial stocks also leading.
* The Dow Jones industrial average <.DJI> closed up 0.16 percent on Monday, the Standard & Poor's 500 Index <.SPX> rose just 0.05 percent and the Nasdaq Composite Index <.IXIC> slipped 0.23 percent.
Snow storms restrained industrial production in the world's largest economy in February but analysts said the data did not alter the view that the factory-led recovery remained on track.
* On the Fed outcome, markets will watch how many officials dissent on the statement language after data showed consumers buying more and firms close to hiring again, and after one official dissented at the last meeting, saying conditions had improved sufficiently to warrant dropping the extended period phase.
* The dollar index <.DXY> was steady at 80.17 after dipping to its lowest since mid-February on Friday, and the euro was steady holding just below $1.37.
* The yen was the best performer, gaining on the euro, dollar and higher yielders, such as the Australian dollar, as investors locked in profits on positions built up against the Japanese currency ahead of possible easing steps by its central bank on Wednesday.
* U.S. crude futures held steady below $80 a barrel after falling 1.8 percent to the lowest close in two weeks on Monday as the dollar remained strong and ahead of U.S. data expected to show another build in crude inventories.
* Gold inched up, underpinned by concerns over Europe's debt problems, but gains were capped with investors wary ahead of the Fed and cautious about tightening in China. Spot gold rose 0.1 percent to $1,109.35 an ounce.