ASIA MARKETS: Japan, Korea Stocks Choppy As Investors Eye Fed

By V. Phani Kumar, MarketWatch

HONG KONG (MarketWatch) -- Japanese and South Korean stocks advanced Tuesday after wavering between gains and losses, as investors pondered whether the U.S. Federal Reserve will maintain its monthly bond purchases.

Japan's Nikkei Stock Average , which had risen in the previous two sessions, was up 0.5% after changing direction multiple times, while the broader Topix also climbed 0.5%.

South Korea's Kospi overcame initial losses to add 0.2%, but Australia's S&P/ASX 200 fell 0.3%.

The performance came on the heels of a triple-digit point gain for the Dow Jones Industrial Average (DJI) overnight.

Trading in the U.S. and other global markets has been volatile, as investors remain focused on the Federal Open Market Committee policy decision Wednesday, which investors are hoping will provide clues on how long the Fed will maintain its $85-billion-a-month in bond purchases.

"We expect this nervousness to continue to dominate until the FOMC rate decision and Chairman [Ben] Bernanke's press conference on Wednesday, with asset prices remaining vulnerable to news headlines, keeping the volatility elevated," Barclays analysts wrote to clients.

In Japan, real-estate, insurance and brokerage stocks climbed alongside many major exporters in the wake of the higher finish on Wall Street, although some banks and telecommunication stocks fell.

Mitsubishi Estate Co. (MITEY) rose 2%, Nomura Holdings Inc. (NMR) climbed 2.9% and MS&AD Insurance Group Holdings Inc. added 1.5%, finding buyers after suffering steep losses earlier in the month.

Shares of Toyota Motor Corp. (TM) added 1.8% on reports the auto giant has raised its Japan sales target, while steel maker JFE Holdings Inc. (5411.TO) soared 3.2% on news it plans to invest $300 million to build an automotive steel sheet plan in Indonesia.

Shares of Sharp Corp. (SHCAY) gained 1.7% after the Asahi Shimbun reported the company was considering producing photocopiers for Samsung Electronics Co. (SSNLF), with a fresh investment from Samsung potentially part of the deal. Samsung shares rose 0.3% in Seoul.

On the downside, shares of Mitsubishi UFJ Financial Group Inc. (MTU) fell 0.3%, and KDDI Corp. (9433.TO) lost 1.5%.

Banks also dropped in Sydney ahead of the release of the Reserve Bank of Australia's minutes from its last meeting.

National Australia Bank Ltd. (NABZY) dropped 0.6% and Macquarie Group Ltd. (MCQEF) fell 1.2%, while Commonwealth Bank of Australia shares (CBAUY) retreated 0.3%.

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