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Asian stocks nudge higher ahead of Fed policy announcement

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U.S.-China trade talks end without major breakthroughs

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Investors await central bank decisions and corporate

earnings

By Gregor Stuart Hunter

SINGAPORE, July 30 (Reuters) - Asian stocks rose

modestly on Wednesday, with investors cautious after trade talks

between the U.S. and China ended without any substantive

agreement and ahead of the Federal Reserve's policy

announcement.

MSCI's broadest index of Asia-Pacific shares outside Japan

was up 0.3%, led by gains for Taiwanese stocks

, after U.S. stocks ended the previous session with mild

losses as traders braced for a slew of corporate earnings.

Australian shares were up 0.7%, while Japan's Nikkei

stock index slid 0.03%, and Hong Kong's Hang Seng Index

skidded 0.4%. The euro edged up from a

one-month low, rising 0.2% to $1.1564, as markets weighed the

EU's trade deal with the Trump administration.

Traders are preparing for several central bank decisions,

key economic reports and corporate earnings during the next few

days, culminating in U.S. President Donald Trump's August 1

tariff deadline.

The Federal Reserve is expected to leave interest rates

unchanged at its policy meeting later on Wednesday, though it

could see a rare dissent by some central bank officials in

favour of lower borrowing costs.

"With labour market conditions near full employment, most

Fed officials want to wait and see how tariffs impact

inflation," said Tom Kenny, senior international economist at

ANZ in Sydney.

Some officials are concerned that tariffs could drive higher

inflation expectations, leading to more persistent price

pressures rather than a one-off hit, he said on a podcast. "Our

expectation is that the Fed should be in a position to cut rates

at the September meeting."

U.S. Treasury bonds advanced ahead of the Fed's meeting,

pushing yields to the lowest in almost four weeks following a

strong auction of seven-year notes that quelled concerns about

diminishing demand for government debt.

The yield on benchmark 10-year Treasury notes

was last 4.328%, the lowest level since July 3. The two-year

yield, which rises with traders' expectations of

higher Fed fund rates, was little changed at 3.873%.

TARIFFS, CORPORATE EARNINGS

The Bank of Japan is expected to hold steady on Thursday and

the focus will be on its comments to gauge when the next rate

increase will come after a trade deal between Japan and the U.S.

cleared the way for the BOJ to resume its rate-hike path.

Ahead of Trump's deadline to reach a deal to avert

imposition of the "Liberation Day" tariffs, some countries'

talks with the U.S. looked set to go down to the wire.

U.S. and Chinese officials agreed to seek an extension of

their 90-day tariff truce on Tuesday, though no major

breakthroughs were announced.

U.S. officials said it was up to President Trump to decide

whether to extend a trade truce that expires on August 12 or

potentially let tariffs shoot back up to triple-digit figures.

India is also bracing for higher U.S. tariffs - likely

between 20% and 25% - on some exports as it holds off on fresh

trade concessions ahead of the August 1 deadline, two Indian

government sources said.

Meanwhile, three South Korean cabinet-level officials met

with U.S. Commerce Secretary Howard Lutnick in a last-ditch push

for a deal.

Oil prices rose as potential supply shortages came into

focus after Trump gave Moscow an abbreviated deadline toward

ending the war in Ukraine. Brent crude futures rose 14

cents, or 0.19%, to $72.65 a barrel.

U.S. tech megacaps Microsoft ( MSFT ) and Meta are

due to report earnings on Wednesday that will set the tone for

the rest of the week and the earnings season.

"It's been a solid U.S. reporting season so far, but these

megacap names need to run it hot and blow the lights out, given

the bar to please has been sufficiently raised," said Chris

Weston, head of research at Pepperstone.

The Singapore dollar strengthened 0.2% after

Singapore's central bank kept its monetary policy settings

unchanged on Wednesday following stronger-than-expected economic

growth in the second quarter.