- POSTED: 16 Dec 2013 16:56
- UPDATED: 16 Dec 2013 19:11
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Asian markets were mostly lower on Monday as dealers bet that the US Federal Reserve will announce a cut in its stimulus programme at its policy meeting this week.
HONG KONG: Asian markets were mostly lower on Monday as dealers bet that the US Federal Reserve will announce a cut in its stimulus programme at its policy meeting this week.
The dollar slipped in Asia as investors adjusted positions before the meeting, while the yen strengthened.
Despite a Bank of Japan survey of business confidence, which jumped to levels not seen since 2007, Tokyo closed down 1.62 per cent, or 250.20 points, to 15,152.91.
Sydney lost 0.17 per cent, or 8.8 points, to end at 5,089.6 and Seoul was flat, edging down 1.76 points to 1,961.15.
Shanghai finished 1.60 per cent, or 35.21 points, lower at 2,160.86 and Hong Kong gave up 0.56 per cent, or 131.30 points, to close at 23,114.66 after a preliminary HSBC survey showed growth in manufacturing activity in China slowed in December.
In other markets, Taipei fell 0.75 per cent, or 63.07 points, to 8,313.87, while Manila gained 0.79 per cent, or 45.41 points, to finish at 5,812.54.
Jakarta ended down 1.17 per cent, or 48.88 points, at 4,125.96, Kuala Lumpur shed 0.13 per cent, or 2.47 points, to 1,837.88, and Singapore closed down 0.40 per cent, or 12.25 points, at 3,053.77.
Bangkok lost 0.95 per cent, or 12.73 points, to 1,328.40, and Mumbai ended down 0.27 per cent, or 56.06 points, at 20,659.52.
Trading has largely been driven over the past week by what investors think the Fed will do at its two-day meeting that ends on Wednesday, with opinion split on whether it will begin winding down its bond-buying programme this month or early next year.
A series of upbeat figures from Washington -- including falling unemployment and strong third-quarter growth -- as well as pro-cut comments from Fed officials have made a "taper" seem more likely.
On Wall Street, the Dow edged up 0.10 per cent and the S&P 500 and Nasdaq were flat on Friday despite the approval by the deeply divided US House of Representatives of a budget deal that could avert another government shutdown.
"Investors mainly are waiting to hear the (policy committee's) assessment of the strength of the US economy, and how that will affect plans for the Fed's stimulus programme," David Lennox, resource analyst at Fat Prophets in Sydney, told AFP.
Talk of a reduction in the US$85 billion-a-month scheme sent the dollar surging last week. It peaked at 103.93 yen on Friday, its highest since late 2008. However, it eased later in the day in New York to settle at 103.23 yen. In Tokyo on Monday, it bought 102.86 yen.
The euro -- which also hit a five-year high of 142.83 yen against the yen on Friday before falling back -- bought 141.45 yen compared with 141.81 yen in New York. The single currency was at US$1.3749 from US$1.3738.
In Japan, the central bank said its Tankan survey had hit a six-year high in the October-December period, underscoring growing optimism among major firms despite a slowdown in the economy.
The report was "positive overall", said Norinchukin Research Institute chief economist Takeshi Minami.
"It's not that dramatic as we saw in the previous Tankan, but the latest outcome confirmed sentiment even among small and mid-sized companies is improving," he added.
Chinese shares were also weighed after HSBC said its purchasing managers' index (PMI) for manufacturing came in at 50.5 for December, down from a final reading of 50.8 in November and the lowest since September, raising concerns about the sustainability of a recent uptick in the economy.
The index tracks manufacturing activity in China's factories and workshops and is a closely watched gauge of the health of the economy.
A reading above 50 indicates growth, while anything below signals contraction.
"The decline in the flash PMI suggests growth momentum has started to weaken," Zhang Zhiwei, an economist at Nomura, told Dow Jones Newswires.
In oil trade, New York's main contract, West Texas Intermediate for January delivery, was down 17 cents at US$96.43 in afternoon trade. Brent North Sea crude for January fell six cents to US$108.77.
Gold fetched US$1,232.30 at 0810 GMT compared with US$1,223.09 late Friday.