HONG KONG -- World stocks were muted as investors awaited an update on the U.S. economy later Wednesday from the Federal Reserve following its two-day policy meeting, while Japanese markets rose on a weaker yen.
Equity investors have been holding back this week as they looked ahead to the Fed's meeting and its implications for the economy. The central bank was expected to update its forecasts for the world's biggest economy and scale back economic stimulus another notch. It was less certain whether policymakers would give any hints on when they want to start raising short-term interest rates from record lows.
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"Markets will focus on any adjustments to growth and inflation outlook, and especially on any shifts in guidance provided on the timing of the first hike," analysts at Mizuho Bank said in a report.
Investors will be looking for clear signs on the direction of the U.S. economy following some mixed data that showed U.S. inflation hitting its highest level in more than a year but home construction data disappointed.
In early European trading, the FTSE 100 index of leading British companies gained 0.4 percent to 6,793.60 while Germany's DAX rose 0.3 percent to 9,952.61. France's CAC 40 added 0.2 percent to 4,546.27.
U.S. stocks were little changed, with Dow futures nearly flat at 16,732.00 and broader S&P 500 futures up less than 0.1 percent to 1,934.40.
In Asia, most benchmarks ended lower, except in Japan, where the Nikkei 225 rose 0.9 percent to close at 15,115.80 as the dollar strengthened 0.1 percent to 102.25 yen. A weaker yen means the cars and electronics made by the country's export giants are less costly for overseas buyers.
South Korea's Kospi shed 0.6 percent to 1,989.49 while Hong Kong's Hang Seng was flat at 23,181.72. In mainland China, the Shanghai Composite Index lost 0.5 percent to 2,055.52.
Australia's S&P/ASX 200 slipped 0.3 percent to 5,382.70. Woodside Petroleum Ltd. led declines on the Australian market, falling 4.6 percent a day after oil giant Royal Dutch Shell PLC said it's selling a 19 percent stake worth around $5 billion.
Benchmarks in New Zealand, Thailand, Indonesia and the Philippines also fell.
In energy trading, benchmark crude oil for July delivery added 41 cents to $106.77 in electronic trading on the New York Mercantile Exchange. The contract dropped 54 cents to settle at $106.36 on Monday.
The euro fell to $1.3561 from $1.3547 in late trading Tuesday.