ASIA MARKETS: Asia Stocks Fall Ahead Of Fed Decision

By Daniel Inman

Asian markets were lower on Wednesday, in cautious trading ahead of next week's Federal Reserve meeting, while Japan was weighed by a stronger yen.

The region followed the U.S. lower, after stocks on the Wall Street fell overnight as investors sold to cash in some of the strong gains for the year and continued to worry about the potential impact of the Federal Reserve reducing its stimulus.

Speculation over when the Fed will start to roll back its bond-buying program has been a persistent theme in Asia since the early summer, when it sparked a series of selloffs in the region. Recent employment data from the U.S. have been strong, which has raised expectations that the Fed could start to withdraw its stimulus as early as in its December policy meeting next week, giving trading a general air of caution.

This caution could be seen in the dollar's movement against the yen, which pulled back overnight, after spending much of Tuesday with striking distance of challenging its year high. The dollar (USDJPY) lost a total of 0.4% against its Japanese counterpart overnight and was last trading at Yen102.80, compared with Yen102.84 late Tuesday in New York.

The yen's push back against the dollar weighed on Japanese stocks, with the Nikkei last down 0.4%.

Stocks also edged lower in China, where Hong Kong's Hang Seng Index lost 0.6% and the Shanghai Composite dropped 0.6%. Investors are waiting for the conclusion of a meeting of senior officials that started Tuesday, where they will review this year's economic progress and map out plans for 2014.

HSBC Holdings PLC (HSBC) , the single largest constituent on the Hang Seng Index, fell 0.5% after the bank said it agreed to sell its 8% stake in Bank of Shanghai to Spain's Banco Santander S.A. . The bank didn't say how much it was selling the stake for but it valued the holding at $468 million at Sept. 30.

South Korea's Kospi was up 0.3%.

In Australia, the S&P ASX 200 fell 0.1%, the index's fifth consecutive decline, as investors continued to worry about the impact of a flurry of initial public offerings hitting the market before the end of the year.

Shares in QBE Insurance Group (QBIEY) gained 3.6% on Wednesday, as J.P. Morgan upgraded the company to neutral after falling a total of 32% on Monday and Tuesday. The insurer's surprise profit warning earlier this week had hit broader sentiment in Sydney.

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