* MSCI Asia-Pacific index up 0.15%, Nikkei climbs 0.7%
* Pound hits 28-mth low on heightened no-deal Brexit woes
* Asian stock markets: tmsnrt.rs/2zpUAr4
By Shinichi Saoshiro
TOKYO, July 30 (Reuters) - Asian stocks edged up on Tuesday as equity investors prepared for an expected U.S. interest rate cut this week while heightened concerns in currency markets about a no-deal Brexit sent the pound to a 28-month low.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.15%.
South Korea’s KOSPI advanced 0.2% and Japan’s Nikkei added 0.7%. Australian stocks climbed as much as 0.7% to touch a record high, supported by buoyant mining shares and adding to the previous day’s tech-driven gains.
The U.S. Federal Reserve begins a two-day policy meeting later on Tuesday, at which it is widely expected to lower interest rates by 25 basis points. If implemented, it would be the central bank’s first rate cut in a decade.
Prospective monetary easing by the Fed has been a key factor behind the recent bull run by global equities, particularly U.S. stocks, which have notched up record highs over the past month.
“Up until now, many market participants had been on the sidelines while the markets factored in the likelihood of the Fed’s rate cut,” said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities, regarding gains by Asian stocks.
“But with the Fed decision looming close some participants appear to be shaking off the caution and buying.”
Also drawing some attention were U.S.-China trade negotiations due to begin in Shanghai on Tuesday, although expectations for progress during the two-day meeting are low with the markets hoping the two sides can at least detail commitments for “goodwill” gestures.
In currencies, the pound extended an overnight slump and fell to $1.2210, its lowest level since March 2017.
Sterling has suffered as investors scrambled to price in the possibility that a last-minute agreement to avert a no-deal Brexit may not be realised under British Prime Minister Boris Johnson, who has said the Brexit divorce was dead.
The British government said on Monday it assumed there would be a no-deal Brexit because a “stubborn” EU was refusing to renegotiate their departure.
The dollar index against at basket of six major currencies was a shade higher at 98.084 and not too far from 98.165, a two-month top scaled on Monday on the back of better-than-expected U.S. GDP data.
The greenback was 0.1% higher at 108.900 yen after brushing a three-week high of 108.950.
Immediate focus for the yen was on the Bank of Japan’s two-day policy meeting due to end later on Tuesday.
The BOJ is widely expected to sand pat on policy, although some expect it to tweak its forward guidance -a pledge central banks make on future monetary policy moves- with the central bank under increasing pressure to keep up with its dovish peers.
The euro was unchanged at $1.1142 after edging up 0.15% the previous day.
Crude oil prices added to the previous gains, when the stronger-than-expected U.S. GDP strengthened the outlook for oil consumption by the world’s largest economy.
U.S. crude futures were up 0.6% at $57.22 per barrel and Brent crude added 0.5% to $64.03. (Editing by Sam Holmes)