REFILE-GLOBAL MARKETS-Asia stocks capped ahead of Fed, oil on defensive

(Corrects typographical error in paragraph 5.)
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Wait-and-see mood ahead of Fed meeting keeps stocks tight
range
* Fed begins 2-day policy meeting later on Tuesday
* Oil extends fall, growth woes outweigh Middle East
concerns

By Shinichi Saoshiro
TOKYO, June 18 (Reuters) - Investor caution ahead of the
Federal Reserve's interest rate meeting capped Asian stocks on
Tuesday, while crude oil prices retreated as global growth
worries overshadowed supply concerns stemming from recent Middle
East tensions.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS inched up 0.05%.
Australian stocks .AXJO added 0.1% while Japan's Nikkei
.N225 dipped 0.05%.
The Fed, facing fresh demands by U.S. President Donald Trump
to cut interest rates, begins a two-day meeting later on
Tuesday. The central bank is expected to leave borrowing costs
unchanged this time but possibly lay the groundwork for a rate
cut later this year. Fresh hopes for looser U.S. monetary policy have been a
tonic for risk assets markets, which were buffeted last month by
an escalation in the trade conflict between Washington and
Beijing. The S&P 500 .SPX has gained 5% this month after
sliding in May on trade war fears.
Focus is now on how close the Fed could be to cutting
interest rates amid the raging U.S.-China trade war, signs of
the economy losing steam and pressure by President Trump to ease
policy.
"The FOMC (Federal Open Market Committee) meeting is the
week's biggest event so there will be a degree of caution
prevailing in the markets," said Masahiro Ichikawa, senior
strategist at Sumitomo Mitsui DS Asset Management.
"Expectations for a rate cut in July have increased
significantly, so the markets could experience disappointment if
the Fed does not send strong signals of impending easing."
U.S. Treasury yields dipped on Monday after the New York
Fed's "Empire" gauge of business growth in the state showed a
fall this month to its weakest in more than 2-1/2-years, fanning
rate cut expectations. The dollar index .DXY against a basket of six major
currencies stood little changed at 97.507 after pulling back
from a two-week high on the decline in Treasury yields.
The pound GBP=D4 traded at $1.2542 after retreating
overnight to a six-month low of $1.2532 on Monday on concerns
that arch-Brexiteer Boris Johnson will replace Theresa May as
prime minister. GBP/
The euro EUR= was a shade higher at $1.1224 after spending
the previous day confined to a narrow range.
U.S. crude oil futures CLc1 shed 0.08% to $51.89 per
barrel after retreating 1.1% the previous day.
Oil prices had slipped on Monday as weak Chinese economic
data released at the end of last week led to fears of lower
global demand for the commodity. O/R
Concerns over weakening demand overshadowed tensions in the
Middle East, which remained high following last week's attacks
on two oil tankers in the Gulf of Oman.

(Editing by Sam Holmes)