GLOBAL MARKETS-Asian shares edge higher after Fed, investors await BOJ

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Fed cuts rates, but Powell's tone disappoints doves
* BOJ seen on hold, but other central banks are easing
policy
* Oil futures drift higher as geopolitical risks remain

By Stanley White
TOKYO, Sept 19 (Reuters) - Asian shares edged higher on
Thursday, tracking some modest Wall Street gains after the U.S.
Federal Reserve cut interest rates as expected but offered mixed
signals on the next easing, keeping investors cautious.
The Treasury yield curve flattened as Fed Chairman Jerome
Powell dashed hopes he would signal further easing while
division among central bankers has increased uncertainty over
how much further rates might fall.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was 0.03%. Japan's Nikkei .N225 rose 0.46%,
while Australian shares .AXJO rose 0.23%.
The yen JPY=EBS traded near a seven-week low versus the
dollar before a Bank of Japan meeting later on Thursday where
policymakers are expected to keep their ultra-easy policy
unchanged.
Central banks around the world have been loosening policy to
counter the risks of low inflation and recession. Easier
monetary policy has generally supported equities.
However, some analysts argue that a bond market rally has
gone too far, saying yields have fallen too fast and curves
flattened too much. Others are worried about the growing amount
of sovereign debt with negative yields.
"This is a small positive for share prices as long as there
is no recession," said Shane Oliver, head of investment strategy
and chief economist at AMP Capital Investors in Sydney.
"The only problem is a 25 basis-point cut was already
expected, and the comments and dot-plot forecasts were not as
dovish as the market hoped. I think the Fed will have to cut
again. There are still some risks from the yield curve."
U.S. stock futures ESc1 were down 0.06% in Asia on
Thursday. The S&P 500 .SPX reversed losses to end 0.03% higher
after Powell said he did not see an imminent recession or think
the Fed will adopt negative rates.
The Fed cut interest rates for a second time this year to
1.75%-2.00% in a 7-3 vote but signalled further rate cuts are
unlikely as the labour market remains strong. The rate cut was widely expected, but the split vote has
raised some concern about predicting the future path of monetary
policy.
So-called dot-plot forecasts from all 17 policymakers showed
even broader disagreement, with seven expecting a third rate cut
this year, five seeing the current rate cut as the last for
2019, and five who appeared to have been against even
Wednesday's move.
The yield on benchmark 10-year Treasury notes US10YT=RR
rose to 1.7944%, while the two-year yield US2YT=RR rose to
1.7621%.
The spread between two- and 10-year Treasury yields
US2US10=TWEB, the most commonly used measure of the yield curve,
narrowed to the lowest since Sept. 9.
The curve inverted on Aug. 14 for the first time since 2007
when long-term yields traded below short-term yields, a widely
accepted indicator of coming recession.
The yen JPY=EBS stood at 108.42 per dollar, only a few
pips from the highest since Aug. 1.
The BOJ is widely expected to maintain its pledge to guide
short-term interest rates at -0.1% and the 10-year government
bond yield around 0%.
Investors will closely watch BOJ Governor Haruhiko Kuroda's
post decision press conference to see how he assesses risks to
Japan's economic outlook.
U.S. crude futures CLc1 ticked up 0.03% to $58.13 per
barrel. Oil markets have stabilised after attacks in Saudi
Arabia over the weekend triggered a supply shock and sent prices
soaring, but the volatility is still a risk as Middle East
tensions remain high.
Washington blames Iran for the attacks, a charge which
Tehran denies. U.S. Secretary of State Mike Pompeo has said the
strike was "an act of war."

(Editing by Sam Holmes)