Overnight

As we wrote over the past weekend, two central banks meet this week, the Fed and the Bank of Japan. This seemed to make Asian investors somewhat nervous overnight as the Fed's two day meeting opens Tuesday. Though no change in interest rates are expected, investors will be parsing Chair Janet Yellen's words for clues.

Meanwhile, Reuters reported, the Nikkei share average dropped on Tuesday morning to a 1-1/2-week low as Wall Street languished and the dollar fell against the yen ahead of the U.S. Federal Reserve's two-day policy meeting, hurting exporter shares.

The Nikkei fell 1.3 percent to 16,400.47 in mid-morning trade, after falling to as low as 16,344.34, the lowest level since July 14. Exporters were sold after the dollar slipped 0.9 percent against the yen to 104.87, with Toyota Motor Corp shedding 1.5 percent and Honda Motor Co sliding 1.7 percent.Traders said that uncertainty over the Bank Of Japan's policy decision at its two-day meeting starting Thursday is making investors risk averse.

By mid-day the Nikkei was down 1.6% while the yen was up strongly. hitting of 104.77 at one point. In Hong Kong the Hang Seng Index rallied 0.9%, the Australian ASX 200 fell 0.2%,, the Kospi traded up 0/4% as second quarter GDP grew faster than expected, 3.2% on the year, versus 2.8% for the previous quarter.The Shanghai composite Index was up 0.5%. In other markets oil prices were up with Brent crude trading up 0.4% and gold down 0.3%.

Wednesday and Friday are the two big days with investors starting to doubt any massive changes in monetary policy since last week both the Bank of England and the ECB held steady. This coupled with what one trader observed:  "[Japanese] fiscal stimulus looks less bold, and we aren’t sure if [Bank of Japan Gov. Haruhiko] Kuroda will ease further." The Japanese plan calls for spreading any stimulus over several years which would lessen the initial impact on markets, according to one source.