* European shares nudge up; Wall St set for higher open
* Fed, BOJ begin two-day policy meetings
* Yen edges up on speculation BOJ could disappoint
* Oil fades after brief rally on Monday
By Marc Jones
LONDON, Sept 20 Shares made modest gains and the
dollar lost ground against the yen on Tuesday as investors
awaited the outcomes of Federal Reserve and Bank of Japan policy
meetings that will conclude on Wednesday.
Nagging doubts about the firepower left available to top
central banks and a slip in oil prices saw the pan-European
STOXX 600 index dip in and out of the red after seven
falls in the last 10 days. It was up 0.3 percent but the oil and
gas sector slipped 0.7 percent.
Wall Street was set for modest gains at the open, according
to stock index futures .
Crude prices slipped after major producer Venezuela, mired
in economic crisis, said oil markets were effectively 10 percent
The yen was marginally stronger in the currency
markets on speculation the Bank of Japan may do little more than
tinker with its stimulus programme and that the Federal Reserve
is likely to stay guarded about its rate hike plans.
"Everybody is just waiting for the BOJ and the Fed - why do
anything today?" said Commerzbank currency strategist Esther
Reichelt in Frankfurt.
"Everyone has already positioned for these events and there
is no new information that could give them a reason to
The yen was changing hands at 101.91 per dollar. It
has risen almost 20 percent over the past 12 months despite the
BOJ's best efforts to weaken it. The euro was flat at
Sterling fell 0.5 percent to $1.2955, a five-week
low, on worries about the political and economic risks of
Britain's pending exit from the European Union.
"The noise on Brexit over the past week has given us more
reason to sell any rallies," said Tobias Davis, head of
corporate treasury sales at Western Union in London.
The pre-BOJ and Fed caution kept European bond market moves
small too, although longer-dated euro zone government yields
edged lower with the BOJ expected to try to lever investors away
from its longer-maturity bonds.
The yield on 30-year German Bunds fell 6 basis
points to 0.58 percent, and there were similar moves on
equivalent Dutch, Finnish, French and Spanish paper.
Other euro zone bond yields also fell, if not quite so
sharply. Germany's 10-year Bund, the region's
benchmark bond, dropped 2.8 bps, turning back into negative
territory, while Portugal saw a second day of outperformance.
British Prime Minister Theresa May met U.S. business chiefs
from firms including Goldman Sachs, IBM and Amazon on Monday in
New York to try and reassure investors, while German leader
Angela Merkel appeared rueful over the refugee crisis.
"If I could, I would turn back time by many, many years,"
For Reuters new Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
While holding patterns predominated in major markets, plenty
of action was on the cards in emerging ones.
Hungary's central bank was expected to stick to its
unconventional easing policy following a surprise S&P upgrade to
investment grade on Friday that has bolstered its high-flying
stock and bond markets and the forint.
Nigeria, which in contrast was downgraded on Friday, also
has a central bank meeting. A Reuters poll shows it is expected
to stay on hold before hiking interest rates later in the year.
Its finance minister, though, made a strident call for a cut on
In Asia overnight, MSCI's broadest index of Asia-Pacific
shares outside Japan slipped 0.1 percent.
Australian shares finished slightly higher. The
Australian Securities Exchange opened without incident on
Tuesday after technical faults caused extensive disruptions on
Japan's Nikkei erased its early gains to end 0.2
percent lower as trading resumed after a public holiday on
Monday. Tokyo markets will also be closed on Thursday, with the
BOJ meeting sandwiched in between.
Oil fell nearly 1 percent to $45.51 per barrel, having
briefly rallied on Monday on Venezuela's bid to talk up a
potential OPEC output freeze. That soon fizzled on indications
that U.S. crude stockpiles had risen again last week.
Gold though added 0.1 percent to $1,314 an ounce, on
expectations that the Fed will stand pat on rates when it ends
its two-day meeting on Wednesday.
(Additional reporting by Jemima Kelly; Editing by Hugh Lawson
and John Stonestreet)