All eyes are on the U.S. Federal Reserve which is beginning its two-day policy meeting today after which the Fed is largely expected to keep interest rates stable while announcing a plan to reduce its balance sheets. The central bank currently has a $4.2 trillion portfolio of Treasuries and mortgage-backed securities. In advance of the meeting the dollar was holding near 8-week highs against the yen, trading at 111.64 as of 1 p.m. HK/SIN, near the high of 111.665 hit on July 27.

The yen has also been under pressure due to political tensions with North Korea and Japanese Prime Minister Shinzo Abe’s call for a near-term election which was spurred by an improvement in his recent approval ratings and notable internal chaos within his main opposition party. The yen also eased against the euro and the Australian dollar during Tuesdays Asian session, trading at 133.70 yen and 89.00 AUD.

Global Stock Market Movements

Anticipation of Wednesday’s Fed announcement sent financial stocks higher on Monday, helping the S&P 500 end higher despite losses in five of the eleven major S&P sectors. The S&P 500 closed at a record for its second consecutive day on Monday while the Dow Jones Industrial Average enjoyed its fifth consecutive record close.

Asian shares wobbled on Tuesday morning despite Wall Street’s strong close, with MSCI’s broadest index of shares outside Japan struggling to find direction between positive and negative territory. Hong Kong’s Hang Seng Index was down 0.06 percent. Japan’s Nikkei 225 index was up 1.72 percent just after midday.