GLOBAL MARKETS-Asian stocks cautiously firmer; BOJ, India eyed
* Asian stocks open higher following positive U.S. lead
* Upbeat U.S. data cheers, but Fed tapering worries persist
* BOJ policy decision, Indian markets in focus
SYDNEY, Sept 5 (Reuters) - Asian stocks edged up on Thursday following a positive lead from Wall Street, while fresh measures to shore up the rupee unveiled by India's new central bank chief could set a positive tone for emerging markets throughout the region.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.2 percent, having closed up 0.1 percent on Wednesday after erasing early losses.
Tokyo's Nikkei put on 0.3 percent, extending Wednesday's 0.5 percent gain.
The moves came as U.S. stocks ended higher for a second day after another set of upbeat U.S. data lifted investor confidence in the economy, though it also adds to the chance of the Federal Reserve tapering its stimulus programme.
"Signs of global economic recovery are a double-edged sword," warned SK Securities analyst Ko Seung-hee. "Optimism will outweigh concerns on Fed's stimulus reduction, but not by much."
Markets were also heartened by the view that a possible military strike in Syria was likely to be limited. The U.S. Senate committee has voted in favour of action, clearing the way for a vote in the full Senate, likely next week.
CENTRAL BANK FOCUS
Former IMF chief economist Raghuram Rajan took over the helm at the Reserve Bank of India in grand style on Wednesday, announcing a raft of steps to liberalise financial markets and the banking sector.
The Bank of Japan, which launched a massive monetary stimulus in April, is expected to maintain its policy with indicators suggesting the programme is working, while the European Central Bank is widely seen keeping rates low for an "extended period".
The BOJ will announce its decision after 0330 GMT and Governor Haruhiko Kuroda will give a media briefing at 0630 GMT.
U.S. data on Wednesday showed auto sales raced past expectations in August, ahead of the closely-watched payrolls data on Friday, extending a string of upbeat U.S. data that has reinforced expectations the Fed will begin to scale back stimulus later this month.
Such expectations have underpinned the U.S. dollar, although a bit of profit-taking emerged on Wednesday, knocking the greenback from a six-week high against a basket of major currencies.
That saw the euro briefly pop back above $1.3200, pulling away from a six-week trough of $1.3138 plumbed earlier this week. Against the yen, the dollar held near a one-month high of 99.86 set on Tuesday, while the euro traded near a two-week peak around 131.81 reached overnight.
Investors were also keeping a close eye on the Indian rupee, which rose on Wednesday on the back of suspected central bank intervention. It closed at 67.065 per dollar versus Tuesday's 67.630, pulling further away from an all-time low of 68.850 plumbed last week.
"The challenges facing the new RBI governor are enormous," said Benoit Anne, strategist at Societe Generale.
He said it was still too early to turn bullish even if the RBI focused on restoring financial stability and stepping up policy response in a credibility-building exercise.
"For now, expect a less volatile INR, higher front-end rates and an even more inverted local rates curve," he wrote in a note to clients.
India, along with many emerging markets, has also been hit hard by an outflow of funds as international investors positioned for the Fed to start scaling back stimulus.
The IMF, in a note prepared for the Group of 20 meeting in St. Petersburg, warned that emerging countries were particularly vulnerable to a tightening of U.S. monetary policy.
It urged strengthened global action to revitalise growth and better manage risks, adding some downside risks have become more prominent.