Global stocks subdued

The dollar touched an all-time low against the euro on Wednesday, while Asian stock markets marked time as many investors sat on the sidelines ahead of a widely expected interest rate cut by the U.S. Federal Reserve.

European equity markets were also set for a largely steady open as investors digest a slew of earnings, headed by Deutsche Bank. Financial bookmakers were picking small opening gains in London, small losses in Germany and around breakeven in France

Caution ahead of the U.S. rate call also kept base metals subdued, but oil extended its slide below $90 a barrel amid recovering Mexican oil exports and an expected increase in U.S. weekly crude inventories.

We're on Fed watch, but the view is a little murky so trade is likely to be very thin -- no one wants to put their head into a buzzsaw, said MF Global commodities analyst Edward Meir.

Investors are betting the Fed will lower its 4.75 percent funds rate at 2:15 p.m. EDT, following on from a bold 50 basis point cut in September, to limit the damage from the housing slump and tighter credit conditions.

What the U.S. central bank says about the economy will also be closely watched for clues to future rate moves.

Earlier, the Bank of Japan, as expected, kept interest rates unchanged at 0.5 percent after its meeting.

Tokyo's Nikkei average ended 0.5 percent higher, while MSCI's measure of other Asia Pacific stocks edged up 0.1 percent by 2:14 a.m. EDT.

The MSCI index remained within sight of a record high touched on Monday and has risen more than 45 percent this year -- triple the gains for MSCI's key world equity index.

Among major markets in the region, South Korea's benchmark KOSPI rose 0.6 percent, Australia S&P/ASX 200 index ended flat, India's BSE Index climbed 0.7 percent by late morning, but Hong Kong's Hang Seng Index eased 0.4 percent at the midday break.

ENERGY STOCKS, MINERS SAG

Investors sold commodity stocks following the fall in U.S. crude, sending energy names such as INPEX Holdings and the major miners including BHP Billiton lower.

U.S. crude shed about 80 cents to $89.58, extending the $4-tumble overnight from near a record high of $93.80 set on Monday. Gold was a touch firmer near $783 an ounce, but also well off the 28-year peak of $794.40 set two days ago.

We're seeing people square off the positions in oil, gold and base metals ahead of the U.S. rate decision, said Savanth Sebastian, a market analyst at CommSec in Australia.

Australia's oil and gas producer Woodside Petroleum fell 2.8 percent, China's top offshore oil and gas producer CNOOC dropped 3.1 percent, oil developer INPEX slid 3.9 percent and mining giant BHP lost 1.7 percent.

Investors also sold some of the region's top exporters such as Canon Inc after data on Tuesday showed U.S. consumer confidence fell to a two-year low, fuelling worries about the health of the region's top export destination.

DOLLAR WEAK

Amid the rate cut expectations, the dollar extended its decline to fresh lows versus the euro and a basket of major currencies.

Dealers are showing no hesitation in selling the dollar against the euro as they think the Fed is likely to go for more rate cuts even after the expected one today, said Tsutomu Soma, senior manager of foreign securities at Okasan Securities.

The dollar's trade-weighted index against six major currencies reached a fresh low of 76.704, surpassing the overnight trough of 76.719.

The euro bought about $1.4440 after reaching a new high near $1.4450, and fetched 165.43 yen, near a 1-½

week high of about 165.90 set overnight.

Against the yen, the dollar was fairly steady above 114.50 as the Japanese unit struggled after the BOJ kept rates unchanged.

Japanese government bonds (JGBs) were barely changed with the yield on the benchmark 10-year JBGs down just one basis point at 1.60 percent, with investors turning their focus to the Fed.