By Daniel Inman
Shares in Tokyo renewed an eight-week high, but Asian markets
overall were mixed on Wednesday as cautious sentiment prevailed
ahead of the conclusion of the much-anticipated U.S. Federal
Reserve policy meeting.
The Fed will wrap up its meeting later Wednesday, with many
investors expecting the central bank to start reducing the scale of
its bond-buying program -- a process that has become known as
"tapering."
"While the Fed itself has said nothing in recent weeks, market
expectations have gradually coalesced around a view that the Fed is
about to make a reasonably token beginning to the taper process,"
said Ric Spooner, chief market analyst at CMC Markets.
In Tokyo, strong index options buying helped push up the cash
market with the Nikkei ending up 1.4% at 14505.36.
"Japan stock investors are encouraged by the relative resilience
in both the dollar and in the U.S. indices' apparent acceptance of
at least a modest amount of Fed tapering," said Kenichi Hirano,
market advisor at Tachibana Securities.
Other markets mainly edged lower, with Australia's S&P/ASX
200 down 0.3% at 5238.10, Hong Kong's Hang Seng Index 0.3% lower at
23117.45, and the Philippines' PSE Composite down 0.2% at
6333.96.
The prospect of a smaller U.S. stimulus program weighed on gold
in early Asian trade, though the yellow metal recovered from its
intraday lows as the trading session progressed -- down 0.3% late
in Asia at $1,306.20 per ounce.
The direction of U.S. monetary policy has been in focus
throughout the summer, with investors scrutinizing every major
release of economic data for clues on how it might influence the
Fed. In recent months, fears of a stimulus withdrawal has resulted
in a number of selloffs in Asia, especially in Southeast Asian
markets like Indonesia and the Philippines.
Some markets won't get a chance to react to the Fed developments
until next week, due to a number of public holidays that will take
place across the region. Both South Korea and Shanghai will be
closed for the rest of the week.
Investors in a number of companies in Tokyo reacted to corporate
news. Kawasaki Heavy Industries (KWHIF) jumped 4.7% following a TV
Tokyo report that the company has received an order worth 180
billion yen (about $1.8 billion) to provide 676 cars to Long Island
Rail Road in New York, citing the New York City Transit
Authority.
Sharp Corp. (SHCAF) added 1.6%, adding to a 6.6% gain on Tuesday
that was brought about by a Nikkei report that the company's
operating profit for the April to September period will be twice as
much as previously forecast.
In Hong Kong, Chinese real-estate developers fell on concerns
Beijing could look to control property prices after official data
showed growth in China's housing prices picked up pace in August.
China Overseas Land & Investment (CAOVY) fell 2.4% and
Evergrande Real Estate Group (EGRNF) fell 1.5%.
"Now that economic growth has rebounded and looks set to achieve
the 7.5% target for 2013, we believe the government's priority may
shift toward containing financial risks and property prices," said
Nomura economist Zhiwei Zhang.
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