Asian shares waver before Bank Of Japan announcement, US dollar rebounds

TOKYO (Reuters) - Asian shares inched tentatively higher on Tuesday as the focus turned to an imminent policy decision from the Bank of Japan, while the dollar rebounded after investors locked in some gains on its recent rally.

MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.1 per cent, wobbling between positive and negative territory after a choppy, losing session on Wall Street overnight.

Hong Kong ended the morning session 0.51 per cent higher - marking a third straight gain - as a pro-democracy protest that shut down parts of the city last week peters out.

Japan's Nikkei stock average drifted down about 0.1 per cent in early afternoon trading, as investors awaited the outcome of the Bank of Japan's policy meeting.

The BOJ is widely expected to maintain its massive monetary stimulus programme and offer a bleaker view on factory output, after signs Japan's economy was hit harder than expected by a national sales tax increase in April.

Tokyo stocks got some help after Bank of Japan Governor Haruhiko Kuroda told a parliament committee meeting in the morning that a weak yen, as a whole, has a positive effect on Japan's economy if the currency's move reflects economic and market fundamentals.

The US dollar added about 0.3 per cent to 109.11 yen, pulling well away from an overnight low of 108.65 and moving back toward its six-year peak of 110.09 yen marked last week.