Asia stocks mixed before Fed, Dollar treads water

Asian stocks were mixed and the dollar marked time on Wednesday, with markets waiting for the US Federal Reserve's policy statement due later in the session for clues to when the Fed will hike interest rate.

Indonesian, Singaporean and Japanese shares fell 0.1 percent .N225, while Australian stocks .AXJO dropped 0.5 percent, according to Reuters.

But Chinese shares, sitting atop multi-year highs reached on hopes of more monetary stimulus, added to gains. The Shanghai Composite Index .SSEC reached its highest since May 2008, while Hong Kong's Hang Seng and South Korea's Kospi also gained.MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.4 percent.

"We expect to see a tug-of-war between the bulls and the bears," said Hue Frame, senior adviser at Atlantic Pacific Securities in Sydney.

The bulls think there won't be a rate rise in the U.S. this year while the bears see one coming "over the next few months," he said.

The Fed statement is due at 1800 GMT, followed 30 minutes later by a news conference with Chair Janet Yellen.

Financial markets are most interested in whether the U.S. central bank will remove the word "patient" from its remarks on raising rates.

A number of strong US employment reports have increased wagers over the past few weeks on the Fed tightening as early as June.

The prospect of the Fed hiking rates in the summer and drawing liquidity away from the rest of the world has caused the dollar's peers to tumble and triggered tumult in emerging market equities.

US debt yields have risen, while euro zone bond yields sank to record lows as the European Central Bank implemented its quantitative easing program.

"The FOMC (Federal Open Market Committee) meeting could well produce some passing volatility but have little net impact, given that policy is sure to be on hold, while Chair Yellen should use plenty of caveats on the policy outlook in her press conference," Sean Callow, a senior currency strategist at Westpac in Sydney, wrote in a note to clients.