By Ankur Banerjee

SINGAPORE (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 was slightly weaker after the Bank of Japan held rates as expected.

Investor focus will now be on Governor Kazuo Ueda’s post-meeting press conference at 0630 GMT as well as the Federal Reserve’s policy decision later on Wednesday, where the U.S. central bank is also expected to hold rates steady.

The listless mood looks set to continue in Europe, with EUROSTOXX 50 futures 0.11% higher and DAX futures little changed.

The yen was last at 149.79 per dollar, a tad weaker on the day 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. Japan’s Nikkei was flat.

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.

Traders will parse Ueda’s comments for clues on how soon the BOJ 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.

“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 euro eased a bit but was 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. It last fetched $1.093175.

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.

That left investor sentiment fragile and market moves muted, with MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.27%.