* European spreadbetters expect steady opening for shares
* Fed could tweak its guidance at conclusion of meeting on
* Yen remains well off recent highs vs. euro, yen
* Gold slips but steadier after overnight tumble from 6-mo
By Lisa Twaronite
TOKYO, March 18 Asian shares rose on Tuesday and
the yen remained well off recent highs as the threat of
immediate military conflict in Ukraine receded, though caution
ahead of this week's U.S. Federal Reserve policy meeting kept
gains in check.
European shares were poised for a steady start, with
financial spreadbetter IG expecting Britain's FTSE 100
to open 5 points higher, or up 0.1 percent; Germany's DAX
to open up 15 points, or 0.2 percent higher; and
France's CAC 40 to open flat.
The United States and the European Union imposed sanctions,
including asset freezes and travel bans, on a small group of
officials from Russia and Ukraine after the weekend referendum
overwhelmingly favoured Crimea joining Russia.
"In immediate focus is Russian president Putin's
speech later today. If he plays down an immediate annexation of
Crimea by Russia, the dollar could gain further ground on
unwinding of risk aversion," said Masafumi Yamamoto, chief
strategist at Praevidentia Strategy in Tokyo.
"But an expression of desire for a swift annexation and
retaliation against sanctions placed by the European Union and
the United States will rekindle economic fears, driving U.S.
government bond yields lower and weighing on the dollar," he
MSCI's broadest index of Asia-Pacific shares outside Japan
added about 0.4 percent.
Japan's Nikkei stock average ended up 0.9 percent,
recovering from a six-week closing low hit on Monday.
Short-covering was likely behind some of Tokyo's gains, as
the ratio of short-selling to overall sales in the Tokyo Stock
Exchange hit a record high of 36.17 percent the previous day.
On Wall Street on Monday, U.S. stocks turned in a solid
performance, with the S&P 500 adding about 1 percent.
FED COULD TWEAK GUIDANCE
For the time being, risk appetite improved as the likelihood
of immediate military conflict faded, and market participants
turned their attention back to the U.S. economic outlook and the
conclusion of the Fed's two-day meeting on Wednesday.
The Fed is expected to continue to stick to reducing its
monthly asset purchases by an additional $10 billion, and could
also alter its forward guidance in its statement.
Fed policymakers could adopt less specific language to
describe conditions under which it might tighten policy, instead
of the bank's current threshold of a 6.5 percent unemployment
rate for considering a rate rise. The rate now stands at 6.7
percent, though Fed officials are still signalling that rates
need to stay low for some time to support the economy.
The dollar's gains against the yen unravelled in late Asian
trading, and it edged down 0.1 percent to 101.63 yen,
while the euro also slightly declined to 141.59 yen.
But both currencies remained above their respective lows
against the yen at 101.20 yen and 140.46 yen touched on Friday
as tensions rose ahead of the weekend referendum.
The euro edged up to $1.3931, within sight of a
2-1/2-year high around $1.3967 touched on Thursday.
The single currency's resilience was despite data on Monday
showing a dip in euro zone inflation, the latest indicator to
back the view that the European Central Bank needs to take
further monetary steps to support growth.
The improvement in risk sentiment took a toll on gold
, which hit a six-month high on Monday before plunging
more than 1 percent. It was last down about 0.4 percent at
$1,360.80 per ounce, well shy of the previous session's peak of
U.S. crude edged down slightly to $98.04 a barrel,
after falling on Monday, as expectations of growing petroleum
stockpiles in the world's biggest oil user duelled with fears
that Ukraine tensions could worsen again.