Asian stocks ex-Nikkei report modest gains ahead of Fed meeting

• Asian stocks rise despite uncertainty ahead of Fed rate decision. 
• Nikkei is flashing red with Yen ticking higher. 

Asian equity markets are reporting modest gains this Tuesday morning with investor caution ahead of the central bank meetings capping upside. 

The Shanghai Composite index is currently adding 0.10% gains. Stocks in Australia and New Zealand are up 0.41% and 0.24%, respectively, and those in Hong Kong are adding 0.67%. 

Japan’s Nikkei, however, is bucking the broader market trend with a 0.46% drop. The weakness in the Japanese stocks could be associated with the 20-pip rise in the Japanese Yen. 

The US Federal Reserve will being a two-day meeting later today. The central bank is expected to level interest rates unchanged this time. However, with growing pressure from the White House to cut rates, the Fed may chose to lay groundwork for a move later this year. 

Goldman Sachs, however, warned last week that markets have overpriced rate cuts and the Fed will keep rates unchanged for the rest of the year. 

With heightened uncertainty with respect to Fed’s monetary policy, the global equity markets may remain sidelined. 

The Bank of Japan’s rate decision is also due later this week. The Japanese central bank is expected to see its stimulus program and again signal willingness to ramp up stimulus if needed. 

Reserve Bank of Australia’s minutes of the June 4 rate decision released earlier today showed growing consensus among policymakers that more easing would be appropriate. The central bank cut rates by 25 basis points to a new record low of 1.25% earlier this month and is seen cutting rates to 0.75% by the year end.