Asian shares mixed as focus turns to Fed

Hong Kong - Asia's markets were mixed in edgy trade on Wednesday after Russia ratcheted up tensions in Eastern Europe by formally absorbing Crimea from Ukraine.

Investors are also awaiting the end of the Federal Reserve's latest policy meeting, hoping for some guidance from its new head Janet Yellen on her plans for interest rates.

Tokyo rose 0.36% to end at 14 462.52 points and Sydney added 0.21% to 5 355.6 points.

But Seoul lost 0.13% to close at 1 937.68 points and Shanghai finished 0.17% lower, giving up 3.46 points to 2 021.73.

Hong Kong ended virtually flat, edging down 14.81 points to 21 568.69.

President Vladimir Putin signed a treaty taking Crimea into Russia's fold following a weekend referendum which Western leaders slammed as illegal.

The move comes less than three weeks after Russian troops seized control of the strategic peninsula in response to the ousting of Ukraine's pro-Moscow government.

Kiev's new leaders warned the showdown had entered a "military stage" after soldiers were killed on both sides following a shootout in Crimea.

Despite the continuing crisis in Europe, traders are focused on the Fed's two-day meeting which ends later on Wednesday.

On Wall Street on Tuesday the Dow rose 0.55%, the S&P 500 shot up 0.72% - to end just short of a record high - and the Nasdaq climbed 1.25%.

Japan trade deficit narrows

"Putin indicated he isn't seeking 'a partition of Ukraine', soothing market fears (for now) that the crisis will escalate further," National Australian Bank said.

"It gave investors the chance to start focusing on the (Fed) meeting tonight."

While analysts expect a further cut in the bank's stimulus programme as the economy picks up, they also predict it will scrap its unemployment rate threshold.

The Fed previously said unemployment must fall to 6.5% before it considers raising interest rates.

On currency markets the dollar traded at  ¥101.61 against ¥101.42 in New York on Tuesday afternoon.

The euro bought $1.3924 and ¥141.49 compared with $1.3932 and ¥141.29.

The Japanese currency hardly moved after official data showed Japan's trade deficit expanded 3.5% year-on-year to ¥800.3bn ($7.9bn) in February.

It was the 20th straight shortfall but well down from a record deficit in January.

The median forecast by economists was for a smaller deficit of ¥595bn, according to a poll by the leading Nikkei business daily.