GLOBAL MARKETS-Asia stocks advance before Fed, fresh Brexit pain sinks pound

* MSCI Asia-Pacific index up 0.2%, Nikkei climbs 0.4%
* Pound sinks to 28-mth low on heightened no-deal Brexit
woes
* European stock futures mixed in early trade
* BOJ stands pat on monetary policy, says will ease if
needed
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Shinichi Saoshiro
TOKYO, July 30 (Reuters) - Asian stocks advanced on Tuesday
in anticipation of a cut in U.S. interest rates later this week
while the pound tumbled to a 28-month low versus the dollar due
to heightened concerns over prospects for a no-deal Brexit.
In early European trade, the pan-region Euro Stoxx 50
futures STXEc1 inched down 0.1%, German DAX futures FDXc1
were little changed and Britain's FTSE futures FFIc1 rose
0.3%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was up 0.2%.
The Shanghai Composite Index .SSEC rose 0.3% and Hong
Kong's Hang Seng edged up 0.2%.
Australian stocks .AXJO climbed as much as 0.7% to touch a
record high, supported by buoyant mining shares and adding to
the previous day's tech-driven gains.
Japan's Nikkei .N225 rose 0.4%, showing limited reaction
to the Bank of Japan's widely anticipated decision to stand pat
on monetary policy.
The BOJ added it would ease "without hesitation" if the
economy loses momentum for achieving the central bank's 2%
inflation target. The U.S. Federal Reserve begins a two-day policy meeting
later on Tuesday, which is expected to result in a 25-basis
point cut in interest rates. If implemented, it would be the
central bank's first rate cut in a decade.
Prospective monetary easing by the Fed has been a key factor
behind the recent bull run by global equities, particularly U.S.
stocks, which have notched up record highs over the past month.
"Up until now, many market participants had been on the
sidelines while the markets factored in the likelihood of the
Fed's rate cut," said Kota Hirayama, senior emerging markets
economist at SMBC Nikko Securities, regarding gains by Asian
stocks.
"But with the Fed decision looming close some participants
appear to be shaking off the caution and buying."
Also drawing some attention were U.S.-China trade
negotiations which begin in Shanghai on Tuesday, although
expectations for progress during the two-day meeting are low
with the markets hoping the two sides can at least detail
commitments for "goodwill" gestures.
In currencies, the pound extended an overnight slump and
fell to $1.2120 GBP=D3 , its lowest level since March 2017.
Sterling has already lost 1.8% this week as investors
scrambled to price in the possibility that a last-minute
agreement to avert a no-deal Brexit may not be realised under
British Prime Minister Boris Johnson, who has said the Brexit
divorce was dead. The British government, facing an Oct. 31 exit deadline,
said on Monday it assumed there would be a no-deal Brexit
because a "stubborn" EU was refusing to renegotiate their
departure.
"The pound is being dropped like a hot potato, as the
likelihood of a no-deal Brexit becomes increasingly plausible,"
wrote Ipek Ozkardeskaya, Senior Market Analyst at London Capital
Group.
"To many, it seems better to jump ship now, as things are
about to get uglier as we approach the Oct. 31 deadline."
The dollar index .DXY against a basket of six major
currencies added to the previous day's gains and touched a
two-month high of 98.206, buoyed by sterling's slide.
The yen JPY= advanced 0.2% to 108.585 per dollar, nudged
higher as it rallied nearly 0.8% against the struggling pound
GBPJPY= .
The euro was little changed at $1.1138 EUR= after edging
up 0.15% the previous day. The single currency jumped to 0.9187
per pound EURGBP= , its highest since September 2017.
Crude oil prices extended the previous day's gains, with the
Fed's expected easing fuelling optimism that it would boost the
economy and fuel demand in the world's biggest oil consumer.
O/R
U.S. crude futures CLc1 were up 0.65% at $57.24 per barrel
and Brent crude LCOc1 added 0.6% to $64.09.

(Editing by Sam Holmes and Jacqueline Wong)