After a volatile sell-off this week in Asia, markets ended mixed Friday, with Chinese indices in flat territory after dropping at the end of the day as multiple lending rate cuts in Hong Kong could not sustain investor sentiment.

The Hang Seng closed up 23 points, or 0.8%, to 28,783, while the Shanghai Composite Index lost 15 points, or 0.27%, to 5315.

In Japan, the Nikkei suffered the region's worst declines, closing down 188 points, or 1.2%, to 15,583, rapidly nearing a 52-week low of 15,262. The Topix fared similarly, down 22 points, or 1.5%, to 1494. The Kospi rose 10 points, or 0.55%, to 1990.

"After a whole week's decline for this week I still see the index becoming very volatile since market sentiment is turning back and most of the investors are cautious about sub prime," says Castor Pang, a market strategist for Sun Hung Kai in Hong Kong. "Hong Kong banks allowed an interest rate cut but that couldn't help the whole day -- only 23 points up was smaller than expectations," adds Pang.

In morning trading, HSBC, Hang Seng Bank, and Bank of China each announced they would cut their prime lending rates by 25 basis points, to 7%. Bank of East Asia and Standard Chartered Bank announced after hours that they would cut their prime lending rates by 25 basis points too, to 7.25%. All reductions will take effect on Monday.

Hong Kong's momentum stocks lost their luster in late trading as uncertainty for the coming week began to creep in during afternoon trading.

China Mobile ( CHL) fell 0.65%, to HK$137, while PetroChina ( PTR) managed to sustain a 0.87% gain, to end at HK$16.14.

China Life Insurance ( LFC) dipped 1.88%, to HK$44.40, while in other financials, HSBC Holdings ( HBC) fell 0.98%, to HK$141 on news of the lending rate cut.

In China, People's Bank of China's deputy governor Wu Xiaoling was publicly dismissive of the recent rise in the yuan, which ended today at 7.4113 vs. dollar, and which some say is headed towards 7. A strengthening yuan is generally seen as a negative for Chinese exporters.

"I hope foreign private equity funds would make more use of the yuan market," Wu told local journalists. "What the country needs is not money, but expertise in investment and management of private equity funds."

In Japan, financials there were even harder hit, with Mizuho Financial ( MFG) plunging 5.7%, to 531,000 yen, while Mitsubishi UFJ ( MTU) dived 4.8%, to 920 yen.

Exporters were also sold, with Sony ( SNE) down 0.74%, to 5,350 yen, Canon ( CAJ) off 1.41%, to 5,580 yen, NTT DoCoMo ( DCM) sinking 4%, to 168,000 yen and Nintendo ( NTDOY) sliding 3.76%, to 61,400 yen.

The yen continued to strengthen in Asian trading, to 112.5 vs. the dollar, from 112.59 yesterday.

Investors in Hong Kong are notably less confident about the slide in Asian shares right now, compared with a month ago when many were unsurprised by a similar round of selling.

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