On Tuesday, nervous investors awaited the Federal Reserve's policy meeting, one of several central bank decisions this week that might set the tone for risk appetite. Global stocks were hovering just below record highs, while currencies were stuck in tight ranges.

On Tuesday, the Reserve Bank of Australia was the center of attention, as it took a step toward dismantling exceptional financial stimulus programs by abandoning an ultra-low bond yield goal. The focus now shifts to the Federal Reserve and subsequently the Bank of England, holding meetings this week.

At 0435 GMT, the MSCI Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) was unchanged, with Japan's Nikkei (.N225) moving 0.4 percent lower and futures pointing to a weaker European and U.S. open.

The MSCI world equity index (.MIWD00000PUS) was down 0.02 percent, with Pan-region Euro Stoxx 50 futures down 0.25 percent and E-mini S&P 500 index futures down 0.21 percent.

The RBA resisted expectations for a more hawkish shift in Asia, driving the Australian and New Zealand dollars lower and short-term bonds higher.

"The market was pricing way more," said Stephen Miller, an investment strategist at GSFM. "They thought that the RBA would take bigger steps to remove monetary accommodation given the upside risks to inflation and I think the RBA have made the minimum adjustment possible."

The Australian dollar fell 0.25 percent to $0.75, remaining inside its two-week range, while the New Zealand dollar fell 0.1 percent to $0.7172. The S&P/ASX 200 index in Australia (.AXJO) was down 0.5 percent.

Australian 3-year benchmark bond yields were six basis points lower at 0.98 percent, compared to their recent high of 1.267 percent on Oct. 29, while 10-year bond yields recovered some of their earlier losses to reach 1.958 percent.

The yield on the 10-year Treasury note remained unchanged, while the yield on the 2-year Treasury note fell one basis point to 0.491 percent.

Even as the country's cabinet announced more significant support for the consumer services industry, Chinese shares (.SSEC) declined 0.6 percent, pulled down by financials and consumer firms. In comparison, Hong Kong's Hang Seng index (.HSI) rose 0.6 percent.

The KOSPI index (.KS11) in South Korea increased by 1.50 percent.

Wall Street surged to new highs overnight, buoyed by increases in energy stocks and Tesla.

After exceeding 36,000 points for the first time during intraday trade, the Dow Jones Industrial Average (.DJI) climbed 0.26 percent. The S&

The yen was down 0.31 percent to 113.65 per dollar, while the euro was down 0.07 percent to $1.15995.

On Wednesday, the Federal Reserve is anticipated to approve plans to reduce its $120 billion monthly bond-buying programs. Investors will be looking for comments on interest rates and how long the current inflation surge will last.

"The elephant in the room is headline and underlying inflation, which are higher than the (Fed) was anticipating," said Steve Englander, head of G10 FX at Standard Chartered.

"We expect the (Federal Open Market Committee) to indicate that if inflation does not return to target levels after tapering finishes, the Fed will move decisively, but that inflation will still fall as supply restrictions loosen. We believe this will be interpreted by investors as a move forward in the timeline of Fed rate hikes "he stated

A further 4% slide in Chinese coal prices on Tuesday left them 50% below last month's all-time high on the commodities markets.

Expectations of high demand and the conviction that a critical producer group will not turn on the spigots too quickly helped oil prices recover from initial losses caused by the release of fuel reserves by the world's largest energy consumer, China.

U.S. crude was down 0.08 percent at $83.98 a barrel, while Brent was up 0.03 percent at $84.76.

Gold was up 0.1 percent to $1,793.24 per ounce on the spot market. Bitcoin was trading at $61,365.2, up 0.7 percent.