GLOBAL MARKETS-Asian stocks retreat as investors await FOMC outcome

* Investors watching for signs of faster policy
normalisation
* Fed likely to pen rosier forecasts, but no policy shift
expected
* 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's Federal Open Market Committee (FOMC)
will end a two-day meeting later in the day.
An index of regional equities excluding Japan
.MIAPJ0000PUS sank 0.3%, led by declines in South Korea's
Kospi .KS11 and Australia's S&P/ASX 200 .AXJO .
The Shanghai Composite index .SSEC slid 0.4%, and Hong
Kong's Hang Seng .HSI fell 0.2%.
Japan's Nikkei 225 .N225 bucked the trend to add 0.1%, but
the broader Topix index .TOPX was flat to slightly lower.
Global markets have been swung 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 that 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 of 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 1.6197% 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% to end at 32,825.95 points, while the S&P 500 .SPX lost
0.16% to 3,962.71. The Nasdaq Composite .IXIC edged up 0.09%
to 13,471.57. 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 0.2% at $1,734.81 per ounce.
Oil prices were lower amid concerns over demand after
Germany, France and other European countries suspended use of
AstraZeneca (NASDAQ:AZN)'s vaccine, a move which could curb the strength of
the region's economic recovery.
Brent crude futures LCOc1 slid 12 cents to $68.27 a barrel
and U.S. crude futures CLc1 slipped 3 cents to $64.77 a
barrel.

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