Asia shares, dollar dither as focus turns to Fed

By Wayne Cole

SYDNEY (Reuters) - Asia share markets turned mixed while the dollar flatlined on Wednesday as tension mounted before the Federal Reserve delivers views on the U.S. economy that could shed light on when U.S. interest rates are likely to rise.

Endless wrangling over the Greek debt crisis also kept trading cautious with Japan's Nikkei (N225) losing early gains to dip 0.4 percent.

MSCI's index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) edged up 0.4 percent but that was from a three-month low.

Shares in Shanghai (SSEC) lost another 0.8 percent ahead of a torrent of IPO's that temporarily could tie up an astonishing 6 trillion yuan ($966.7 billion) of capital.

On Wall Street, the Dow (DJI) ended Tuesday up 0.64 percent, while the S&P 500 (SPX) added 0.57 percent and the Nasdaq (IXIC) 0.51 percent.

In Athens, Prime Minister Alexis Tsipras accused Greece's creditors on Tuesday of trying to "humiliate" Greeks with more cuts as he defied a growing drumbeat of warnings that Europe was preparing for his country to leave the euro.

The public rancor left little hope that a meeting of EU finance ministers on Thursday would make any progress.

Yet financial markets kept their nerve with yields on Spanish and Italian debt actually ending lower on Tuesday.

The single currency was hovering around $1.1252 and well within the $1.1150/1.1384 range of the past week or so. The U.S. dollar index (DXY), which measures it against a basket of currencies, was a fraction lower.

The dollar also barely budged on the yen at 123.40 , with most major currencies in a holding pattern, as traders waited for the conclusion of the Federal Open Market Committee meeting.

The Fed's statement is due at 1400 ET, followed half an hour later by Chair Janet Yellen's news conference where every syllable will be dissected for clues on the timing of lift off for interest rates.

Also out after the policy meeting will be the committee members' latest forecasts for economic growth and interest rates, both of which might be nudged lower.

There will be particular attention on the median forecast for the funds rate over 2015 which could be trimmed from the previous 0.625 percent, in line with Yellen's assurance that any tightening cycle will be very gradual.

"Those looking for some type of concrete message that

September is effectively a done deal will likely be disappointed," Tom Porcelli, chief US economist at RBC Capital Markets, said.

Yellen was likely to maintain a flexible approach, leaving open the option to act on rates at any meeting, Porcelli said.

In commodity markets, oil prices were a shade firmer as plentiful output was met by strong demand, with the market waiting for U.S. storage figures later in the day.

U.S. crude futures edged up 11 cents to $60.11 a barrel, while Brent added 5 cents to $63.78.

Gold was sidelined at $1,180.50 an ounce .

(Corrects Fed meeting time in paragraph 11)