* Asia shares edge up after Wall St makes more records
* Fed seen certain to raise rates 25 bps later Wednesday
* Investors nervous in case Fed hints at faster pace of
* Dollar supported as US yields outpace EU and Japan
* Oil slips back amid recurring concerns of over supply
By Wayne Cole
SYDNEY, Dec 14 Asia shares crept cautiously
higher on Wednesday while a hush settled on the U.S. dollar as
investors felt certain the Federal Reserve would raise rates for
the first time in a year, but were less sure what it might
herald for 2017.
European bourses were tipped to open a shade lower by spread
betters, while E-mini futures for the S&P 500 were down a
miniscule 0.02 percent.
Australia led the going early with a gain of 0.8 percent
, though MSCI's broadest index of Asia-Pacific shares
outside Japan could only manage a 0.1 percent
Japan's Nikkei and Shanghai stocks both
dithered either side of flat, as did much of the region.
The outcome of the Fed's policy meeting will be announced at
1900 GMT, followed by Chair Janet Yellen's news conference half
an hour later.
A quarter point move is fully priced in, as are two more
hikes next year. Any hint that the Fed may move more
aggressively than that would likely send the dollar higher and
jolt emerging markets.
All eyes are thus on the Fed's economic and rate "dot" plots
for a sense of how policymakers think President-elect Donald
Trump's policies will impact growth and inflation.
"As most FOMC participants are likely to wait for more
specifics on Trump's fiscal policy initiatives before formally
altering their forecasts, markets may be disappointed by the
lack of additional insight provided," said Michelle Girard,
chief U.S. economist at RBSM.
"We expect most participants will continue to see two to
three rate hikes as appropriate in 2017."
Treasuries have already priced in a rate hike and more, with
two-year yields reaching ground last trod in April 2010 at 1.18
In contrast, the European Central Bank only last week
extended its asset buying campaign and moved to purchase more
A RICH SPREAD
As a result, the spread between U.S. and German two-year
yields is now the widest since late 2005, with Treasuries
offering a mouth-watering premium of 191 basis points.
The gap kept the euro on the defensive at $1.0635,
not far from the recent 20-month trough at $1.0505. The dollar
was likewise steady on the yen at 115.24 and against a
basket of currencies at 101.000.
Speculation that a Trump Administration will implement more
debt-financed fiscal stimulus and cut regulation helped all
three major U.S. stock indexes to records this week. The Dow
ended fewer than 100 points from the magical 20,000 mark.
Bank of America Merrill Lynch's latest survey of investors
found expectations of global growth at 19-month highs and
inflation at the second highest percentage in 12 years.
Fund managers were the most optimistic about corporate
profits in more than six years and allocations to bank stocks
surged to an all-time peak.
The Dow ended Tuesday up 0.58 percent, while the S&P
500 gained 0.65 percent and the Nasdaq 0.95
percent. Tech stocks joined the party as Apple climbed
1.7 percent and Amazon 1.9 percent.
However, confidence in Asia toward business conditions over
the coming six months dropped in the final quarter of 2016 to
its lowest level in a year as firms fretted about sluggish
demand in a persistently low-growth economic environment, a
Thomson Reuters/INSEAD survey found.
Asian companies are particularly reliant on demand from
China, which is firmly in Trump's protectionist sights.
Bulk commodities from iron ore to coal have also benefited
from the reflation trade, combined with signs of stronger growth
in China. Again, any hint the Fed might step up the pace of
tightening could undo some of those gains.
Oil ran into profit-taking following a reported rise in U.S.
crude inventories and an estimate that OPEC may have produced
more crude in November than previously thought.
U.S. crude futures, which hit a high of $53.41 on
Tuesday, were down 70 cents at $52.28 a barrel. Brent crude
eased 68 cents to $55.04.
(Reporting by Wayne Cole; Editing by Eric Meijer and Kim