By Shashwat Pradhan
Sept 21 (Reuters) - Australian shares inched up on Wednesday, driven by financial and mining stocks, but gains were capped by caution ahead of a Bank of Japan policy decision amid speculation that it will make critical changes to its massive stimulus programme.
The S&P/ASX 200 index .AXJO gained 0.2 percent or 8.13 points to 5,311.7 by 0151 GMT.
The Bank of Japan (BOJ) is expected to make negative interest rates the centrepiece of a new policy framework - widely seen as a desperate attempt to show it still has the means to to lift Japan out of years of stagnation. BOJ is going to be the interesting one purely from the whole idea of a comprehensive review of monetary policy, which makes the market sit up and think," said Evan Lucas, market strategist at IG Markets.
Twenty-one of 31 economists in a Reuters poll of economists said the BOJ would announce further easing, while six said the next move would be announced at the review on Oct. 31-Nov. 1. also are awaiting a U.S. Federal Reserve policy decision due later in the global day. Both hawkish and dovish comments from Fed officials recently have fanned volatility in the markets, although consensus is now centred on a U.S. rate hike by year-end. MKTS/GLOB
Australia's benchmark index was pushed higher by gains in financials and materials.
Australia and New Zealand Banking ANZ.AX , one of the "big four" Australian banks, extended gains into a sixth-straight session to climb more than 1 percent.
Whitehaven Coal WHC.AX was one of the top performers, rising as much as 5.2 percent to touch a more than three-year high, on the back of a rise in thermal coal price forecasts. miner BHP Billiton (LON:BLT) Ltd BHP.AX rose for a fifth-straight day, rising 1 percent before shedding some of the gains.
Retail giant Wesfarmers Ltd WES.AX gained as much as 1.4 percent to hit a near one-month high.
New Zealand's benchmark S&P/NZX 50 index .NZ50 edged higher by 5.1 points or 0.1 percent to 7,313.55.
Fonterra Co-operative Group FCG.NZ , the world's biggest dairy exporter, advanced 0.5 percent after international milk prices rose in the overnight Global Dairy Trade auction Holdings KMD.NZ rose as much as 7.1 percent to vualt to a 20-month high on the back of strong earnings.
At the other end, Scales Corp SCL.NZ was the biggest percentage loser on the index, sliding more than 3 percent.
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