By Lisa Twaronite

TOKYO (Reuters) -- Asian shares and the dollar inched higher on Tuesday but caution reigned after Wall Street skidded as investors awaited this week's U.S. Federal Reserve policy decision.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent, after Wall Street logged losses, with U.S. trading volume at its lowest in a month as markets awaited the Fed outcome.

Japan's Nikkei stock index rose 0.6 percent as investors awaited the outcome of the Bank of Japan's two-day policy meeting later this session, as well as BOJ Governor Haruhiko Kuroda's post-meeting speech.

A few investors were betting that Japan's central bank would muster additional easing measures. But the majority believe that the BOJ will simply warn of heightening global risks while holding off on actual stimulus, holding its fire in case the Fed's long-awaited rate hike, whenever it comes, triggers a fresh wave of market turmoil.

"It seems logical that they would want to see the wash up from this week's Federal Reserve meeting and hold the ability to be reactionary," Chris Weston, chief market strategist at IG, said in a note.

"If we see anything from Mr. Kuroda and the BOJ today, it will be setting the scene for additional measures if they so need," he said.

The Japanese yen edged down slightly ahead of the BOJ outcome, with the dollar trading at 120.35 yen, up about 0.1 percent from late U.S. trade.

The euro inched down about 0.1 percent to $1.1308, while the dollar index, which tracks the greenback against a basket of six major rivals, added about 0.1 percent to 95.302, moving away from a three-week low of 94.913 touched overnight.

The conclusion of the Fed's two-day meeting on Thursday remained the market's key focus, with many economists now believing that volatile global markets and increasing evidence of slowing momentum in China will prevent the U.S. central bank from raising interest rates for the first time since 2006.

A Reuters poll of 72 economists last week showed a slight majority expect an interest rate rise from the current 0-0.25 percent, but a smaller sample saw just a 50-50 chance.

In commodities, crude oil futures clawed back some ground lost in the previous session.

U.S. crude rose about 0.8 percent to $44.33 a barrel, underpinned by data showing a drop in U.S. supplies. It shed 1.4 percent on Monday.

Brent crude added about 0.7 percent to $46.69, after skidding 3.7 percent to its lowest settlement in two weeks.

Spot gold edged up slightly to $1,108.86 an ounce, moving away from last week's one-month low.

(Reporting by Lisa Twaronite; Reporting by Eric Meijer)