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Asian Markets Update: Bourses End Mixed Ahead of FOMC Meeting

Meanwhile, Korea posts a trade deficit for the first time in 26 months, and the Kospi ends down.

TOKYO-- Cautious trading prevailed in Asia ahead of the

Federal Open Market Committee

meeting. Key bourses in the region clung to slim gains or losses as they ended mixed.

The benchmark

Nikkei 225

index fell 116.32 to 19,423.38, while the


index, comprising shares listed on the

Tokyo Stock Exchange's

first section, slipped 10.81 to 1697.15. The


small-cap index rose 0.14 to 103.95, while the Nikkei


shares fell 16.59 to 2315.28.

Although Japan's stock market has so far managed to stave off significant losses -- even when U.S. equity trading has gone haywire overnight -- investors are still concerned about market volatility in the wake of a U.S.

Federal Reserve

TheStreet Recommends

interest-rate hike.

Offsetting those fears, however, is the start of half a dozen new mutual funds by the end of the month. Some traders are even predicting the Nikkei could reach 20,000 before profit-taking comes in ahead of the fiscal year-end March 31.

"It's increasingly hard to estimate where Japanese equities are heading in the next few weeks," said one trader at a U.S. house. "But one thing is for sure, there is a lot of money floating around here, and it's not just from retail."

Traders focused on domestic issues today and will likely do so until the end of the FOMC meeting. Bank shares finished lower as investors unwound cross shareholdings, with the

Industrial Bank of Japan


ending down 66, or 6.4%, to 967,

Fuji Bank


finishing down 64, or 6.0%, to 1002, and

Sumitomo Bank


closing down 56, or 3.9%, to 1399.

Tech shares were mixed.


(SNE) - Get Sony Corp. Report

edged up 170 to 27,130, helped by the firm's new business plan that would enable customers to buy Sony products over the Internet.



, considered to be one of the cheaper tech shares remaining, rose 30, or 2.0%, to 1551.



, however, closed down 80, or 2.0%, at 3890.

The greenback was trading around 107.22 against the yen, with dollar-bulls gaining short-term momentum, currency traders said.

"If Japanese investors truly want to act like global-market players, they need to wake up and realize now is a great time to conduct yen-carry trades. Otherwise, the U.S. hedge funds will be the only ones locking in the profits," said Akio Sakanaka, head of

Sovereign Asset Management


Hong Kong's

Hang Seng

index finished up 121.52 at 15,653.86, as investors bought back index heavyweights after the sharp selloff Monday.

Hutchison Whampoa


rose 3.000, or 2.7%, to 115.00, while

China Telecom

(CHL) - Get China Mobile Ltd. Report

climbed 0.700, or 1.5%, to 48.800.

Selected broadcasting shares garnered some attention, with

Television Broadcast


ending up 2.250, or 3.9%, to 59.500.

Meanwhile, Korea's


index shed 15.13, or 1.6%, to 928.75, hurt by news that the country posted a trade deficit for the first time in 26 months. The

Ministry of Finance and Economy

said Korea locked in a $400 million deficit for January with exports rising 32% and imports surging 46%.



index closed up 111.50, or 1.14%, to 9856.39 on expectations of continued economic growth. Markets will be closed from Wednesday to Feb. 8 for the Lunar New Year.