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Asian stocks waver ahead of ECB meeting

BANGKOK — Asian stock markets were muted Thursday after the U.S. Federal Reserve took no new action to boost the U.S. economy and investors awaited announcements from the European Central Bank after its president vowed to keep the euro currency union intact.

The Fed’s embrace of the monetary policy status quo was largely anticipated by markets. But it also appeared to signal in a statement released after a two-day meeting a growing inclination to take further steps to lift the U.S. economy out of its funk. The Fed noted that growth had slowed over the first half of the year. Yet analysts remain divided over whether the central bank will further ease policy later this year.

Attention is now squarely focused on Thursday’s meeting of the ECB. Global markets were boosted the past week after ECB President Mario Draghi vowed to do whatever it takes to keep the euro intact as Spain’s financial situation deteriorated.

Hopes have been high that the ECB will announce powerful new measures to stem Europe’s chronic debt crisis but it might be restrained by German opposition to the central bank resuming big purchases of government bonds — to lower borrowing costs of financially struggling countries such as Spain or Italy — or other steps.

Jens Weidmann, a leading ECB policymaker through his position as president of the Bundesbank, Germany’s national bank, doesn’t appear to be convinced that bond-buying is the right strategy. He continues to caution the ECB not to overstep its mandate of fighting inflation.

“The ECB is unlikely to meet current elevated expectations for far more aggressive action, risking another sharp turn for the worse in the markets,” analysts at Daiwa in Hong Kong said in a report. “While market expectations are high, we believe that Draghi will not deliver what it is looking for, in particular large-scale bond purchases.”

Japan’s Nikkei 225 stock average was up 0.3 percent at 8,669.54 while Hong Kong’s Hang Seng dropped 0.5 percent to 19,718.24. South Korea’s Kospi was flat at 1879.99 and China’s Shanghai Composite was fractionally lower at 2,122.01.

Markets in the Philippines, New Zealand and Indonesia rose.

On Wall Street, the Dow Jones industrial average fell 33 points to 12,976 on Wednesday and broader indexes also closed down.

In energy trading, benchmark crude for September delivery was down 7 cents at $88.84 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 85 cents to end Wednesday in New York at $88.91 per barrel after the government said supplies have dropped more than analysts expected.

The euro was slightly higher at $1.225 and the dollar rose 0.1 percent to 78.45 yen.