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MELBOURNE, Jan 22 AAP

January 22 2013, 12:18AM

The Australian share market is trading marginally higher as investors wait to see if the Bank of Japan will move to stimulate the Japanese economy.

At 1200 AEDT on Tuesday, the benchmark S&P/ASX200 index had risen 3.6 points, or 0.08 per cent, to 4,781.1 points, and the broader All Ordinaries index had added 3.3 points, or 0.07 per cent, to 4,805.5 points.

On the ASX 24, the March share price index futures contract was up five points at 4,748 points, with 9,536 contracts traded.

Japan's central bank is expected to announce a two per cent inflation target and possible measures to stimulate the economy when it wraps up its two-day meeting on Tuesday.

In the United States, Wall Street was closed overnight for the Martin Luther King Jnr public holiday.

In London, the FTSE 100 index of top companies gained 0.43 per cent on Monday to 6,180.98 points, a level unseen since May 2008.

OptionsXpress market analyst Ben Le Brun said the Australian market was continuing its recent steady move upwards as optimism grew that the US would resolve its debt ceiling problem, and European markets lifted overnight.

"When the US (share market) is on holiday, we don't have much by way of a lead to work off," Mr Le Brun said.

"But hopefully that Bank of Japan policy announcement might just give us the impetus to go on with the job in the afternoon session."

On the local bourse at 1203 AEDT, in the resources sector, global miner BHP Billiton was 19 cents higher at $36.73, and Rio Tinto had climbed 62 cents to $67.07.

Engineering firm Macmahon Holdings was two cents, or 7.84 per cent, stronger at 27.5 cents as it won a $1.8 billion deal to help Fortescue Metals Group expand its Christmas Creek iron ore mine in Western Australia's Pilbara region.

Fortescue was advanced eight cents to $4.61.

Among the major banks, National Australia Bank dropped 13.5 cents to $26.715 after reports that Spanish financial giant Santander had denied it was considering buying NAB's troubled UK banks.

Commonwealth Bank rose 10 cents to $62.30, ANZ eased 11 cents to $25.58, and Westpac lifted four cents to $26.52.

At 1209 AEDT, national turnover was 763.9 million securities worth $1.24 billion, with 343 stocks up, 425 down and 310 unchanged.