Asian markets rise ahead of US Fed meeting

HONG KONG: Asian markets rose and the dollar remained subdued against the yen Wednesday ahead of a US Federal Reserve meeting most economists expect will deliver fresh stimulus to kickstart the economy.

Comments from China's prime minister hinting at new monetary easing also provided a fillip, while traders are confident of a positive verdict in Germany as judges are due to rule on whether Berlin can legally take part in the eurozone's bailout fund.

Tokyo surged 1.46 percent by the break, with much better-than-expected July economic data helping to lift sentiment, while Hong Kong jumped 0.94 percent, Sydney advanced 0.80 percent, Shanghai climbed 0.16 percent and Seoul added 1.39 percent.

The US Fed will later begin its two-day policy meeting, after which there is a wide expectation it will unveil new measures to spur growth, with most analysts tipping a third round of bond-buying, or quantitative easing.

On Wall Street the Dow was up 0.52 percent and the S&P 500 rose 0.31 percent while the tech-rich Nasdaq was flat.

Adding to buying incentives were data showing the US trade deficit was virtually unchanged in July from June, an unexpected reading although the figures showed imports and exports dropped due to a global slowdown.

"Market sentiment is very positive," said Brett McGonegal, chief executive officer at Reorient Financial Markets in Hong Kong.

"Once people get into the buying mood it is not a one-day event, we could have an overall buying appetite that could absorb a shock," he told Dow Jones Newswires.

But with the likelihood of more dollars flooding the market the currency retreated in New York from recent highs against the yen and stayed weak in Tokyo.

In early Asian trade it bought 77.91 yen, against 77.73 yen in New York late Tuesday. In Asia on Tuesday the greenback was buying around 78.20 yen.

However, also weighing on the unit was a warning from Moody's that it would downgrade the United States' AAA credit rating if lawmakers did not get the country's debt situation in order.