Asian stocks drifted slightly lower and the euro clawed back lost ground as investors waited for the end later on Wednesday of a Federal Reserve policy meeting expected to announce further steps to stimulate the flagging U.S. economic recovery.

The dollar fell close to a record low against the yen, pressured by strong selling by Japanese exporters that triggered traders' stop-losses.

The Fed is expected to announce plans to rebalance its portfolio in favor of longer-dated bonds and so push long-term interest rates -- already near historic lows -- even lower in a move known as Operation Twist.

Markets fluctuate so much during the day these days it's very hard to pick a trend, said David Spry, analyst at F.W. Holst in Melbourne. Anyone who thinks the market's just going to recover quickly is going to be misplaced.

Oil and copper fell after the International Monetary Fund cut its growth forecasts for this year and next and warned that the United States and Europe could slip back into recession, raising worry that demand for commodities might slow.

Gold hovered just above $1,800 an ounce, little changed on the day, supported by its safe haven allure amid fears that the euro zone's sovereign debt problems could trigger a new banking crisis.

ATTRACTIVE VALUATIONS?

Japan's Nikkei share average <.N225> was flat, although analysts said market falls of recent weeks had made valuations attractive, with two-thirds of Tokyo stocks now trading below their book value -- the net asset value of the entire company. <.T>

MSCI's broadest index of Asia Pacific shares excluding Japan fell 0.1 percent. The index is down around 21 percent from its 2011 high in April.

Stocks on Wall Street drifted marginally lower overnight <.SPX> as earlier enthusiasm about an euro zone debt crisis resolution faded, although Apple Inc shares hit an all-time high. S&P 500 futures edged up 0.3 percent in Asian trade. <.N>

BELEAGUERED EURO

European debt worries were tempered to some extent after Greece promised further cuts to its public sector before a second conference call with international lenders that Athens must persuade to give it more loans to avoid bankruptcy next month.

That relief helped the beleaguered euro strengthen against the dollar, letting the single currency recover following a downgrade of Italy's credit rating. The euro rose more than a cent to $1.3712, from a low of $1.3591 on Tuesday.

(The euro) was a bit oversold and there was a paring in those positions. No one wants to be over-committed ahead of the FOMC (Fed meeting), said Rob Ryan, foreign exchange and interest rate strategist at BNP Paribas in Singapore.

The dollar dipped to as low as about 76.11 yen at one point on trading platform EBS, nearing a post-World War Two record low of 75.941 yen hit in August, before recovering to around 76.32 yen.

Against a basket of major currencies <.DXY>, the dollar slipped 0.1 percent.

Oil eased, with Brent crude futures down 0.2 percent at $110.29 a barrel and U.S. crude falling 0.4 percent to $86.60.

Copper fell 0.3 percent to $8,332 a tonne.

(Additional reporting by Alex Richardson and Masayuki Kitano in Singapore, Lisa Twaronite and Antoni Slodkowski in Tokyo and Miranda Maxwell in Melbourne; Editing by Richard Borsuk)

Japan BNP Paribas