Asian stocks edged higher yesterday on hopes that falling oil prices will boost consumer spending and spur profits for exporters such as Toyota, while the dollar clung on to gains ahead of an interest rate review by the US Federal Reserve.

European shares were seen opening slightly higher, buoyed by fresh record highs on Wall Street.

The dollar rose against the yen and the euro as traders expected the US central bank to reiterate concerns about inflationary pressures. It starts a two-day meeting yesterday and will make a statement today.

Financial markets do not expect the Fed to change interest rates this week, but analysts are divided over whether its next move will be to raise rates further to quell inflation or to begin lowering borrowing costs to cushion against a slowdown in the world’s largest economy.

Gold remained vulnerable after sliding about 2 percent as investors sold the metal as retreating energy prices eased concerns about inflation.

Japan’s Nikkei share average surrendered early gains to end a fraction lower as a price war started by Softbank Corp. dragged down other mobile phone operators such as KDDI Corp., which tumbled more than 7 percent. But the broader TOPIX index rose 0.2 percent.

Yahoo Japan Corp. surged by its daily limit of 4 000 yen, or 8.8 percent, after the country’s most popular Web portal posted the day before a 22 percent rise in quarterly net profit, while Fujitsu Ltd jumped more than 2 percent after raising its profit forecast.

“It looks like we can have positive expectations for mid-term earnings results,” said Toshihiko Matsuno, assistant general manager of investment research at SMBC Friend Securities. “However, stock prices have also risen quite a bit lately, so I do wonder how much results are already factored into stock prices.”

Toyota Motor Corp. gained 1 percent. South Korea’s main index rose 0.1 percent, led by exporters after the Wall Street rally raised the outlook for corporate profits in the key US market. Early gains were pared as investors locked in profits on recent outperforming stocks.

Samsung Electronics Co. Ltd., the world’s biggest maker of memory chips, climbed 0.2 percent.

The Dow industrials rose nearly 1 percent to a fresh record closing high on optimism about the spending outlook at Wal-Mart Stores Inc. and the belief that falling gasoline prices will leave more money in the pockets of consumers heading into the year-end shopping season.

Hong Kong’s blue-chip index was up 0.5 percent in mid-afternoon dealings, flirting with its record peak.

Australia’s benchmark index turned tail and slid 0.3 percent as lower oil and copper prices hurt resource stocks such as BHP Billiton.

BHP Billiton Ltd./Plc., the world’s top miner, shed 1.3 percent. The MSCI index of Asian shares outside of Japan was up 0.2 percent in mid-afternoon dealings.

Oil extends slide</B>