Asian stock markets flat ahead of Fed decision

The anticipated announcement comes as investors remain nervous about Europe's sovereign debt crisis and concerns over a possible Greek default.

Tokyo and Sydney were flat, while Hong Kong lost 0.85 percent and Seoul edged up 0.20 percent.

"The market is expecting some stimulus plan from (Federal Reserve chairman Ben) Bernanke, so if that doesn't happen it will be an ugly night," said RBS Morgans principal investment adviser Chris Macdonald in Sydney.

Expectations have been high that the Fed will announce fresh easing after Bernanke left the door open for such a move at a speech last month.

"Given the weakness of the (recent US) economic data, the (Federal Reserve) is now almost certain to do something, but exactly what is still not entirely clear," said Paul Ashworth, an economist at Capital Economics in a note.

A proposal to swap its short-term bond holdings to long-term -- dubbed Operation Twist -- appears to be the front runner instead of a third round of liquidity pumping, he told Dow Jones Newswires.

The thinking goes that lower longer term interest rates will further encouraging bank lending to companies and corporate investment.

The dollar was rangebound ahead of an announcement.

In early Asian the euro was at $1.3715 against $1.3703 late Tuesday in New York, while the greenback bought 76.32 yen versus 76.46 yen.

The euro was at 104.68 yen against 104.76.

Markets remain under pressure because of the ongoing eurozone crisis, with Greece the main focus of concern as it struggles to convince lenders it is able to put in place policies to meet terms of a multi-billion-dollar bailout.

The country's Finance Minister Evangelos Venizelos is trying to unlock the latest eight billion euro ($11 billion) tranche of a rescue package that will help it avoid a default next month.

Most analysts fear that if Athens does default then the crisis could move to other economies, with Italy and Spain tipped to be the next in line.

New York's main contract, West Texas Intermediate for October delivery, was down 39 cents at $86.53 a barrel in morning Asian trade, and Brent North Sea crude for November dropped 24 cents to $110.30 a barrel.

Gold fetched $1,800.50 an ounce by 0200 GMT, up from the $1,791.95 level it was at by 1000 GMT Tuesday.

Copyright AFP (Agence France-Presse), 2011