March 20 (Reuters) - A look at the day ahead in Asian

markets.

The central bank policy party rolls on into Wednesday with China

and Indonesia under the spotlight in Asia ahead of the main

event in Washington later in the day, as investors continue to

digest the Bank of Japan's historic rate hike the day before.

The yen fell to a four-month low on Tuesday, hurtling towards

151.00 per dollar as investors took the BOJ's messaging to mean

any further tightening will be gradual.

If so, rate and yield spreads will continue to support major

currencies like the dollar at the expense of the yen. The "carry

trade" dynamic could be underscored even more on Wednesday by

the Federal Reserve's policy statement, updated economic

projections and Chair Jerome Powell's press conference.

The yen's slide on Tuesday bucked the trend among major

global currencies and pushed it back within sight of the recent

multi-decade lows around 152.00 per dollar.

The weak yen goes hand in glove with stronger Japanese

stocks - the Nikkei 225 is back above 40,000 and within touching

distance of its record high 40,472 points from earlier this

month. A new high on Wednesday?

Markets across the continent could open Wednesday in buoyant

mood and shrug off the previous day's weakness, thanks to

another rise on Wall Street and fall in U.S. bond yields.

Any upside could be limited, however, by investors'

reluctance to take on too much exposure ahead of the Fed. And

although China's economic surprises index is at a 10-month high,

worries persist over the country's property crisis.

This helps explain why 30-year Chinese government bond yields

are down 40 basis points this year, recently hitting a record

low of below 2.4% and coming within a whisker of dropping below

10-year yields, which also have hit 22-year troughs.

Analysts reckon the People's Bank of China will leave its

one- and five-year loan prime rates unchanged, after it left key

bank lending rates on holds earlier this month.

Despite the deflationary pressures still stalking the

economy, monetary policy has "pretty much reached the limits of

what it can do ... and so any further easing is likely to be

modest," according to Win Thin at BBH.

Bank Indonesia, meanwhile, is also expected to hold rates

for a fifth month on Wednesday but cut in the second quarter of

the year, according to a slim majority of economists in a

Reuters poll.

With inflation within the target range of 1.5% to 3.5% since

July and the economy showing signs of a slowdown, all 31

economists in the March 8-15 poll agreed the central bank's next

move would be a cut. The only issue is when.

Here are key developments that could provide more direction

to markets on Wednesday:

- China LPR decision

- Indonesia monetary policy decision

- U.S. Fed policy decision