ASIA MARKETS: Nikkei Hits 8-week High In Mixed Day For Asia

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.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires