The euro hit a fresh record high against the yen yesterday amid doubts about a December rate hike from Bank of Japan (BoJ) and on data showing an improvement in German investor confidence, while shares stalled ahead of the US Federal Reserve?s interest rate decision.

Crude oil steadied after slipping to $61 a barrel on ample supplies and warm weather in the United States, the world?s biggest market for heating oil.

Euro zone government bonds dipped, but were little moved by the signs of improvement in German investor sentiment in the survey by the ZEW institute.

The euro hit a fresh record peak of 155.03 against the yen, its fourth this month, as data showing slowing Japanese wholesale price growth trimmed expectations for the Bank of Japan to tighten monetary policy next week.

The euro rose 0.1 percent against the dollar to trade at $1.3250.

The Federal Reserve is expected to leave US interest rates unchanged at 5.25 percent when it announces its decision. Markets will be looking for any clues from the Central bank as to whether the greatest risks come from slowing growth or rising prices.

Sterling hit a session high against the dollar and the euro after data showed annual consumer price inflation rose to an above forecast 2.7 percent in November, its highest since comparable records began almost a decade ago.

?Today?s release will give hawks on the MPC (Monetary Policy Committee) more ammunition to argue the case for a further rate hike next year, perhaps at the February inflation meeting, and should help provide a further boost to sterling in the near term,? said Rob Carnell, an economist.

European stocks stalled ahead of the Fed meeting, with the FTSEurofirst 300 index unchanged at 1,457 points.

French wines and spirits group Remy Cointreau rose 4.4 percent after it reported a 76.5 percent rise in first-half profits and failed to quell lingering takeover speculation.

Hopes of strong Christmas sales boosted German retailer Metro for the second day running while oil majors BP, Total and Royal Dutch Shell were among the biggest negative influences after the overnight fall in oil prices.

Asian markets fared better, with the Nikkei average in Japan adding 0.7 percent to 16,637.8 points as the weaker yen boosted exporters and Australian shares hit a record high on plans for a merger in the resources sector.