Asian stocks rose briskly on Wednesday, with sentiment lifting as Wall Street rose before a likely hike in U.S. interest rates, while the dollar held to large gains made as Treasury yields picked up. Spreadbetters saw the upbeat momentum in equities being retained in Europe and forecast a higher open for Britain's FTSE .FTSE, Germany's DAX .GDAXI and France's CAC .FCHI. The Federal Reserve is expected to announce a hike in interest rates when its two-day policy setting meeting ends later in the day. It would be the first U.S. rate hike in nearly a decade, signaling the beginning of an end to an expansionary monetary policy that has supplied a tidal wave of liquidity to risk asset markets globally. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 2 percent. Shanghai stocks .SSEC edged up 0.8 percent and Australian shares rallied 2.2 percent. Crude oil prices bouncing from multi-year lows buoyed energy-related shares. Japan's Nikkei .N225 surged 2.5 percent, rebounding from a two-month low struck the previous day as risk sentiment has blown hot and cold ahead of one of the most-anticipated market events this year. "A lot of capital will be looking for a temporary home outside of the U.S. so as to avoid the likely increase in volatility after the hammer falls. And in the context of our current world markets, for many Japan looks like a credible home," said Martin King, co-managing director at Tyton Capital Advisors. On Wall Street Tuesday, the Dow .DJI added 0.9 percent and the S&P 500 .SPX advanced 1.1 percent. Bank stocks, which will likely benefit from higher rates, were among the market leaders. With a hike seen as a mostly done deal after more than a year of anticipation, investor focus is fixed on how the Fed might opt to pace its tightening cycle next year. The central bank has hinted that it intends to hike rates gradually. "(Fed chair) Yellen should stress data-dependence in following up with further tightening next year and will surely not drop any heavy hints about the timing of the next move. No one can be confident how the dollar will emerge from all this but volatility seems assured," wrote Sean Callow, a senior strategist at Westpac. The dollar index .DXY last stood at 98.126, having gained 0.6 percent on Tuesday. The dollar gained 0.2 percent to 121.835 yen JPY=, pulling further away from a six-week trough of 120.35 struck Monday. The euro traded near $1.0900 EUR= after recoiling from a seven-week peak of $1.1060. Supporting the greenback, Treasury yields rose overnight as gains on Wall Street reduced the appeal of safe-haven bonds and stable U.S. consumer price data reinforced the case for a Fed rate hike. In commodities, crude oil dipped after gaining for two successive days. U.S. crude CLc1 was down 0.7 percent at $37.08 a barrel. Concerns of global oversupply had sent crude to a seven-year low of $34.53 earlier this week. Three-month copper on the London Metal Exchange CMCU3 bounced 0.5 percent to $4,590 a tonne on short covering. It still traded within distance of a one-week low of $4,554 struck overnight on the dollar's surge and concerns that a U.S. rate hike could trigger a debt default among highly leveraged miners. A strong dollar makes dollar-priced metals more costly for non-U.S. investors. Spot gold XAU= bounced modestly to $1,064.25 an ounce following two days of losses. The metal fell to a six-year low of $1,045.85 earlier this month on a firmer greenback and prospects of higher U.S. interest rates, which would dent the allure of non-yielding gold.
