TOKYO, July 30 — Asian stocks edged up today as equity investors prepared for an expected US interest rate cut this week while heightened concerns in currency markets about a no-deal Brexit sent the pound to a 28-month low.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.15 per cent.

South Korea's Kospi advanced 0.2 per cent and Japan's Nikkei added 0.7 per cent. Australian stocks climbed as much as 0.7 per cent to touch a record high, supported by buoyant mining shares and adding to the previous day's tech-driven gains.

The US Federal Reserve begins a two-day policy meeting later today, at which it is widely expected to lower interest rates by 25 basis points. If implemented, it would be the central bank's first rate cut in a decade.

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Prospective monetary easing by the Fed has been a key factor behind the recent bull run by global equities, particularly US stocks, which have notched up record highs over the past month.

“Up until now, many market participants had been on the sidelines while the markets factored in the likelihood of the Fed's rate cut,” said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities, regarding gains by Asian stocks.

“But with the Fed decision looming close some participants appear to be shaking off the caution and buying.”

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Also drawing some attention were US-China trade negotiations due to begin in Shanghai today, although expectations for progress during the two-day meeting are low with the markets hoping the two sides can at least detail commitments for “goodwill” gestures.

In currencies, the pound extended an overnight slump and fell to US$1.2210, its lowest level since March 2017.

Sterling has suffered as investors scrambled to price in the possibility that a last-minute agreement to avert a no-deal Brexit may not be realised under British Prime Minister Boris Johnson, who has said the Brexit divorce was dead.

The British government said on Monday it assumed there would be a no-deal Brexit because a “stubborn” EU was refusing to renegotiate their departure.

The US dollar index against at basket of six major currencies was a shade higher at 98.084 and not too far from 98.165, a two-month top scaled on Monday on the back of better-than-expected U.S. GDP data.

The greenback was 0.1 per cent higher at 108.900 yen after brushing a three-week high of 108.950.

Immediate focus for the yen was on the Bank of Japan's two-day policy meeting due to end later today.

The BOJ is widely expected to sand pat on policy, although some expect it to tweak its forward guidance — a pledge central banks make on future monetary policy moves — with the central bank under increasing pressure to keep up with its dovish peers.

The euro was unchanged at US$1.1142 after edging up 0.15 per cent the previous day.

Crude oil prices added to the previous gains, when the stronger-than-expected US GDP strengthened the outlook for oil consumption by the world's largest economy.

US crude futures were up 0.6 per cent at US$57.22 (RM235.72) per barrel and Brent crude added 0.5 per cent to US$64.03. — Reuters