* MSCI ex-Japan up 0.9 percent, HK leads gains
* Dollar on backfoot as Fed looks set to ease policy
* U.S. election outcome seen positive for stocks
By Sugita Katyal
SINGAPORE, Nov 3 (Reuters) - Asian stocks rose on Wednesday tracking overnight gains on Wall Street while the dollar was under pressure ahead of a Federal Reserve meeting that is expected to provide more stimulus to spur a flagging recovery.
European shares also opened higher as a swing towards the Republicans in U.S. elections lifted investor sentiment.
The MSCI index of Asia Pacific stocks outside of Japan was up 0.9 percent helped by gains in materials and energy in line with Wall Street.
Hong Kong's Hang Seng Index led the gains in Asia leaping to their highest in 28 months spurred by gains in banks, property and oil counters. The index jumped higher after breaking above a key Fibonacci retracement level.
South Korea's KOSPI closed up 0.9 percent on foreign buying with banks and insurers up amid strengthening expectations for an interest rate hike after the Australia central bank's surprise decision to increase rates.
Japan's financial markets are closed because of a public holiday.
The dollar stayed on the backfoot in Asia with the euro holding around $1.4000 and the Aussie just off parity ahead of the Fed meeting.
Traders said the market was unwilling to make new bets ahead of the U.S. central bank's policy decision.
"The announcement itself could well be a non-event, since so much is priced in, but in the medium- and longer-term, Asia looks increasingly set to be on the receiving end of a lot more capital inflow," DBS said in a research note.
"Inflows are likely to be strong for the next 5-10 years as Asian demand growth outpaces that of the G3," it said. "Currencies will remain under upward pressure and ditto for equities."
Due at around 1815 GMT, the Fed is expected to announce plans to buy hundreds of billions of dollars in U.S. government debt in order to foster a stronger economic recovery.
Markets are generally priced for the Fed to initially commit to buying at least $500 billion in Treasuries over five months, although much uncertainty surrounds the scope and pace of bond purchases.
"Should the Fed deliver a bigger outcome, say in the region of $1 trillion or above, the U.S. dollar will likely come under renewed pressure. However, a more cautious amount of asset purchases will be U.S. dollar positive," said Mitul Kotecha, head of global FX strategy at Credit Agricole in Hong Kong.
"If we see a more cautious Fed, euro/dollar will slip back below $1.40, cable below $1.60. We're going to see Aussie give up some of its gains."
Markets have also kept an eye on the results of U.S. mid-term elections on Tuesday. Television networks projected the Republicans would seize control of the House of Representatives although the Democrats were likely to maintain the Senate.
A divided Congress is typically seen as bullish for stocks as it makes passing new laws harder and lessens uncertainty for business.
Some analysts have said a Republican victory could be positive for the U.S. currency on market hopes for increased fiscal austerity and less government regulation. But the main market focus is still on the Fed.
Gold inched down despite the weaker dollar as investors stayed on the sidelines on the last day of the Federal Reserve's meeting.
Gold eased $2.40 to $1,354.60 an ounce, off a two-week high at $1,365.49 hit on Monday. Gold struck a record around $1,387 last month.
Oil climbed to a six-month high above $84 for a second straight session after an industry report showed declines in U.S. inventories across fuel categories, a sign chronic oversupply may subside in the world's top user.
U.S. crude for December rose 36 cents to $84.26, after touching $84.50 earlier on Wednesday, the highest intraday price since May 4. ICE Brent rose 30 cents to $85.71.
(Additional reporting by Jun Ebias in HONG KONG and Ian Chua in SYDNEY; editing by Kazunori Takada)