REFILE-GLOBAL MARKETS-Asian stocks, commodities fall as Fed meeting looms

                                
 (Refiles to add dropped word in paragraph six)	
                                
 * Dollar demand seen strong from Japanese funds
                                
 * U.S. Treasuries firm on extended Fed rate pause bets
                                
 * Silver takes a beating, pulling down gold and oil
                                
 * Nikkei down about 1 percent, KOSPI hovers below record
high

                                
 By Saikat Chatterjee	
                                
 HONG KONG, April 26 (Reuters) - Silver tumbled on Tuesday
and Asian shares pulled back from recent three-year highs in a
bout of profit-taking before the Federal Reserve meeting this
week where investors are seeking clues on when it plans to begin
exiting its ultra-easy monetary policy. 	
                                
  The drop in silver, triggered by an options expiry later in
the day, spread to the gold and oil markets with U.S. crude
futures dropping more than a $1 after Saudi Aramco's chief
executive said the kingdom was not comfortable with current oil
prices. [ID:nL3E7FQ09J]	
                                
  "There is some risk reduction because the market wants to
watch if Bernanke will say anything about a change of stance,"
said Tetsu Emori, a Tokyo-based commodities fund manager at
Astmax Investments.	
                                
 "Any change of stance is highly unlikely."  	
                                
 Fed Chairman Ben Bernanke will hold the first news
conference ever by a Fed chief after the two-day policy
committee meeting ends on Wednesday.	
                                
 The euro also slipped after European Central Bank
Governor Jean-Claude Trichet said that a strong dollar is in the
interest of the United States, though the prospects of widening
interest rate differentials between the Fed and the ECB may
check losses for the single currency.[ID:nEBE7DA00T]	
                                
 Equity markets across the region were in the red with
Japan's Nikkei ending down more than 1 percent. Shares
outside Japan , which last week hit their highest
level since early 2008, were down about 0.8 percent.	
                                
 European shares were set to start weaker, tracking falls on
Wall Street and in Asia, with key indices set to open 0.3-0.5
percent lower. [ID:nLDE73K1C7]      
 	
                                
 Credit markets, too, reflected the overall cautious
sentiment with credit spreads widening slightly as the broader
market was wary of a heavy pipeline after a recent flood of
issuances.	
                                
 Issuance of dollar-, euro- and yen-denominated bonds from
Asia ex-Japan have already exceeded $30 billion year-to-date,
clearly ahead of the pace set in 2010, which saw record issuance
of more than $83 billion.	
                                
     	
                                
 AND THE WINNER THIS MONTH IS..	
                                
 South Korea's KOSPI dipped 0.4 percent after hitting
yet another record high earlier, though it is set to outperform
regional indices in a big way this month.	
                                
 The KOSPI's near 5 percent rise in April has been led by
automakers and chipmakers with the former benefiting from the
production hit suffered by Japanese competitors in the wake of
last month's earthquake and tsunami and the latter getting a
boost from strong earnings by Intel and Apple.	
                                
 While the broader market appeared overbought on some
technical indicators, automakers offered attractive valuations,
with Hyundai Motor shares trading at 10 times its 12-month
forward price earnings multiples, compared with Toyota's
 around 21, according to Starmine data.      	
                                
 	
                                
 EXTENDED PAUSE	
                                
 In currency markets, the greenback came under a bit of
selling pressure versus the yen in early trade but losses
were limited on expected dollar demand from Japanese asset
management firms as a number of investment trusts, or toushin,
are due to be launched on Tuesday.    	
                                
 Trade was volatile as investors were reluctant to
make big bets before the April 26-27 Federal Open Market
Committee meeting while rate markets reflected that any
tightening measure was going to be a long slow grind.
 	
                                
 In fed fund futures markets <0#FF:>, the contract expiring
in December 2011 has fully priced in a target interest rate of
0.25 percent, the top end of the central bank's current rate
range of zero to 0.25 percent but the January 2012 contract only
implied a slim 6 percent chance of another hike to 0.5 percent.	
                                
 Such bets on a glacially slow increase in rates have kept
traders interested in buying U.S. Treasuries, pushing the
10-year U.S. yield down more than 20 basis points from this
month's highs of 3.36 percent, despite a recent warning of a
ratings cut by ratings agency Standard & Poor's.	
 	
                                
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 (Additional reporting by Rujun Shen in SINGAPORE, Hideyuki Sano
in TOKYO and Umesh Desai; Editing by Ramya Venugopal)