Australia, New Zealand: Shares calm before potential BOJ storm

[BENGALURU] Australian shares inched up on Wednesday, driven by financial and mining stocks, but gains were capped by caution ahead of a Bank of Japan policy decision amid speculation that it will make critical changes to its massive stimulus programme.

The S&P/ASX 200 index gained 0.2 per cent or 8.13 points to 5,311.7 by 0151 GMT.

The Bank of Japan (BOJ) is expected to make negative interest rates the centrepiece of a new policy framework - widely seen as a desperate attempt to show it still has the means to to lift Japan out of years of stagnation.

"The BOJ is going to be the interesting one purely from the whole idea of a comprehensive review of monetary policy, which makes the market sit up and think," said Evan Lucas, market strategist at IG Markets.

Twenty-one of 31 economists in a Reuters poll of economists said the BOJ would announce further easing, while six said the next move would be announced at the review on Oct 31-Nov 1.

Investors also are awaiting a US Federal Reserve policy decision due later in the global day. Both hawkish and dovish comments from Fed officials recently have fanned volatility in the markets, although consensus is now centred on a US rate hike by year-end.

Australia's benchmark index was pushed higher by gains in financials and materials.

Australia and New Zealand Banking, one of the "big four" Australian banks, extended gains into a sixth-straight session to climb more than one per cent.

Whitehaven Coal was one of the top performers, rising as much as 5.2 per cent to touch a more than three-year high, on the back of a rise in thermal coal price forecasts.

Global miner BHP Billiton Ltd rose for a fifth-straight day, rising one per cent before shedding some of the gains.

Retail giant Wesfarmers Ltd gained as much as 1.4 per cent to hit a near one-month high.

New Zealand's benchmark S&P/NZX 50 index edged higher by 5.1 points or 0.1 per cent to 7,313.55.

Fonterra Co-operative Group, the world's biggest dairy exporter, advanced 0.5 per cent after international milk prices rose in the overnight Global Dairy Trade auction Kathmandu Holdings rose as much as 7.1 per cent to vualt to a 20-month high on the back of strong earnings.

At the other end, Scales Corp was the biggest per centage loser on the index, sliding more than 3 per cent.

REUTERS