GLOBAL MARKETS-Asian stocks retreat as investors await Fed

* Investors watching for signs of faster policy
normalisation
* Europe stocks set to open lower as caution reigns
* BOE, BOJ policy decisions also due this week

By Kevin Buckland and Elizabeth Dilts Marshall
TOKYO/NEW YORK, March 17 (Reuters) - Asian stocks fell on
Wednesday, tracking Wall Street as investors waited to see if
the U.S. Federal Reserve will signal a faster path toward
policy normalisation than previously expected.
The U.S. central bank ends a two-day meeting later in the
day.
An index of regional equities excluding Japan
.MIAPJ0000PUS pulled back 0.5%, led by declines in South
Korea's Kospi .KS11 .
The Shanghai Composite index .SSEC lost 0.3% and Hong
Kong's Hang Seng .HSI fell 0.3%.
Japan's Nikkei 225 .N225 was flat to slightly lower, while
the broader Topix index .TOPX bucked the trend to rise 0.1%.
European stocks were set to open weaker, with pan-region
Euro Stoxx 50 futures STXEc1 down 0.1%. FTSE futures FFIc1
also edged lower in early deals.
Global markets have been knocked in recent weeks by a rout
in Treasuries that saw the benchmark yield soar to a more than
one-year high as bond investors bet accelerating COVID-19
vaccinations and massive fiscal stimulus would spur
faster-than-expected growth and inflation in the world's biggest
economy.
The volatility stoked speculation the Fed may be forced into
a technical adjustment to the levers controlling its policy
rate, but few expect the central bank to act on the matter at
this week's meeting, even if it releases rosier growth
forecasts. "We expect (Chair Jerome) Powell to note the FOMC has the
tools to intervene if the bond market becomes disorderly or
constrains the economic recovery," analysts at Commonwealth Bank
of Australia wrote.
"But we expect Powell to push back against talk of policy
tightening because of the large amount of labour market slack
... U.S. bond yields and the USD could jump if the FOMC's
post-meeting statement and Powell's statement are not deemed
dovish enough."
Benchmark 10-year Treasury yields US10YT=RR continued to
consolidate around 1.6%, standing at 1.6268% on Wednesday in
Asia. They reached 1.6420% on Friday for the first time since
February of last year.
An index tracking the dollar against six major peers =USD
held at around 91.90 following its retreat from a three-month
high of 92.506, touched last week.
Currency market caution may extend all week, with the Bank
of England announcing its policy decision on Thursday, and the
Bank of Japan wrapping up a policy review on Friday in which it
may phase out a numerical target for its asset buying.
On Tuesday, the Dow Jones Industrial Average .DJI fell
0.39%, while the S&P 500 .SPX lost 0.16%. The Nasdaq Composite
.IXIC edged up 0.09%. E-mini futures for the S&P 500 EScv1 slipped 0.04% on
Wednesday.
Gold prices edged up to hover at their highest in more than
two weeks on prospects of higher inflation.
Spot gold XAU= was up about 0.3% at $1,736.55 per ounce.
Brent crude futures LCOc1 rose 33 cents to $68.72 a barrel
and U.S. crude futures CLc1 added 40 cents to $65.20 a barrel.

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