By Dominique Fong
Stock markets in Asia finished Tuesday’s session mixed as investors remained cautious ahead of central-bank meetings this week in Japan and the U.S.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +2.62% ended down 0.5% and Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.54% closed 0.3% lower, while South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.16% added 0.25%. In China, the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP -0.15% finished up 0.6% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.46% gained 0.5%.
Traders said uncertainty about monetary policies weighed on some stock markets.
“People are either taking bets off the table or reluctant to position themselves” before this week’s meetings, said Alex Furber, senior client services executive for CMC Markets in Singapore.
Stocks in Japan were falling as the yen /zigman2/quotes/210561789/realtime/sampled USDJPY +0.3323% strengthened slightly against the U.S. dollar. Many analysts say they expect Bank of Japan officials, who will begin a two-day monetary policy meeting Wednesday, to unveil further easing measures in a bid to stimulate the stagnant economy, generate inflation and depreciate the yen. A weaker currency helps Japanese exporters sell goods at more-competitive prices abroad.
Shares of financial companies led Japan’s stock market lower. Sumitomo Mitsui Financial Group /zigman2/quotes/203656770/delayed JP:8316 +1.54% fell 2.6% and casualty insurer Sompo Japan Nipponkoa Holdings /zigman2/quotes/201620552/delayed JP:8630 +2.31% lost 2.3%.
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Mitsubishi Motors shares /zigman2/quotes/202404490/delayed JP:7211 +2.63% plunged 9.6% in afternoon trading following a Nikkei newspaper report that the auto maker had been using improper fuel-economy test methods as far back as the 1990s, which the company confirmed after the market was closed.
Malaysia’s benchmark stock index slipped after state investment fund 1MDB said it defaulted on a $1.75 billion bond issue, which triggered cross-defaults on two other Islamic notes totaling 7.4 billion ringgit. The FTSE Bursa Malaysia KLCI /zigman2/quotes/210598052/delayed MY:FBMKLCI +0.04% fell 1.2%.
In China, trading was choppy as worries about a short-term liquidity squeeze put pressure on the market. Chinese brokerage firm Minsheng Securities estimated that about 870 billion yuan of seven-day reverse repurchase agreements would mature this week.
Analysts say speculative money has flowed into China’s commodities futures market, particularly for steel and iron ore. Futures contracts for iron ore hit a peak for the year to date last week, but declined after the Dalian Commodity Exchange raised transaction costs overnight.
In South Korea, shares rose after preliminary data from the Bank of Korea showed that the economy in the first quarter grew 2.7% from a year earlier, better than expected. The economy slowed from the previous quarter, weighed by sluggish exports and weak consumer sentiment.
Investors are awaiting the Federal Reserve’s next interest-rate decision, expected Wednesday at the end of a two-day policy meeting. A rate increase is unlikely, though officials’ view of the economy could offer clues about whether they might move in June.
In the commodity sector, volatility in crude prices weighed on shares of major oil producers. Australia’s BHP Billiton /zigman2/quotes/201448516/delayed AU:BHP -0.82% fell 3% and Rio Tinto /zigman2/quotes/200083756/delayed AU:RIO +0.14% slipped 3.1%.
—Yifan Xie and Rhiannon Hoyle contributed to this article.