*

Asian stocks stutter after Wall Street falls sharply

overnight

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Worries over tariffs, trade and geopolitics dent sentiment

*

Euro near five-month high after Germany passes debt

overhaul

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Yen steadies after BOJ stands pat on rates as expected

(Updates after BOJ policy decision)

By Ankur Banerjee

SINGAPORE, March 19 (Reuters) - Asian stocks were

subdued on Wednesday and gold hovered near record highs as

economic worries and a shifting geopolitical landscape kept risk

appetite in check, while the yen steadied after the Bank of

Japan held rates as expected.

The yen was last at 149.33 per dollar, little

changed on the day after a choppy initial reaction as

policymakers sought to spend more time gauging how mounting

economic risks from higher U.S. tariffs could affect Japan's

fragile recovery.

Rising odds of the Japanese central bank raising interest

rates have helped push the yen 5% higher against the dollar so

far this year, with it touching a five-month high of 146.545 per

dollar last week.

Having just raised interest rates in January, the BOJ board

voted unanimously to maintain the bank's short-term policy rate

at 0.5% at a two-day meeting that ended on Wednesday.

"In the end, however, it is a question of 'when' not 'if'

the BoJ will hike again," said Fred Neumann, chief Asia

economist at HSBC.

"The next move could come as early as June, as more evidence

of wage increases trickles in. The uncertain global trade

outlook, however, could even push the next BoJ rate hike well

into the second half of 2025."

The focus will now be on Governor Kazuo Ueda's post-meeting

press conference at 0630 GMT for clues on how soon the bank

could next raise rates, a decision complicated by the contrast

between benign domestic data and uncertainty caused by U.S.

President Donald Trump's trade policies.

Charu Chanana, Saxo's chief investment strategist, said

without stronger signals from Ueda, expectations for a May move

by the BOJ could weaken, reinforcing near-term yen softness.

Japan's Nikkei was 0.69% higher, staying near the

levels it traded at before the decision.

The euro remained close to the five-month high it

reached on Tuesday after Germany's parliament approved plans for

a significant increase in spending, handing conservative leader

and the chancellor-in-waiting Friedrich Merz a huge boost.

Geopolitical tensions escalated as Israeli airstrikes

pounded Gaza and killed more than 400 people on Tuesday,

shattering nearly two months of relative calm since a ceasefire

began, unnerving investors.

Adding to the unease, Russian President Vladimir Putin

agreed to temporarily stop attacking Ukrainian energy facilities

but refrained from endorsing a full 30-day ceasefire.

"While Russia-Ukraine ceasefire talks are ongoing, most feel

that we're no closer to anything truly tangible and a lasting

agreement," said Chris Weston, head of research at Pepperstone.

That left investor sentiment fragile and market moves muted,

with MSCI's broadest index of Asia-Pacific shares outside Japan

down 0.11%.

Indonesian shares swung between gains and losses in

choppy trading on Wednesday, a day after the stock market there

clocked its sharpest fall in nearly three years on Tuesday, on

concerns over the government's fiscal strategy.

U.S. stocks fell sharply on Tuesday as investors exercised

caution ahead of a monetary policy decision from the Federal

Reserve, while gauging the potential impact of Trump's tariff

policies.

FED UP NEXT

The BOJ's decision came hours before the policy decision

from the Fed, where the U.S. central bank is expected to hold

interest rates steady. The focus will be on new economic

projections from policymakers as well as comments from Fed Chair

Jerome Powell.

The dollar index, which measures the U.S. currency

against six rivals, was steady at 103.34, hovering near the

five-month low it touched in the previous session.

"The Fed, just like the market, desperately needs some

visibility on trade, tariffs and overall policies, and we expect

Powell to avoid ifs and buts and instead continue to advocate

for a data-dependent approach," said Julien Lafargue, chief

market strategist at Barclays Private Bank and Wealth

Management.

Traders are pricing in 58 basis points of easing this year

from the Fed, with the first cut fully priced in for July, LSEG

data showed.

In commodities, Brent crude futures eased 0.24% to

$70.39 a barrel, while U.S. West Texas Intermediate crude

slipped 0.2% to $66.75 in early trading.

Gold prices eased to $3,029 per ounce, just below the record

high touched on Tuesday as geopolitical jitters led to

safe-haven flows.