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Hong Kong - Asian markets were mixed on Tuesday after suffering a heavy sell-off in the previous session, with traders still nervous over emerging economies as they await the Federal Reserve's next move on its stimulus programme.
The dollar edged higher against the yen after sinking to near two-month lows on Monday but that was unable to stop Japan's Nikkei from sliding to a two-and-a-half-month low.
Tokyo closed down 0.17%, or 25.57 points, to 14,980.16, ending below 15,000 for the first time since mid-November, while Seoul rose 0.34%, or 6.59 points, to 1,916.93.
Sydney, which was catching up with Monday's losses as it was closed for a holiday, fell 1.26%, or 65.8 points, to 5,175.1.
Hong Kong ended flat, dipping 15.46 points to 21,960.64 and Shanghai closed 0.26%, or 5.21 points, higher at 2,038.51.
Regional markets slumped on Monday, taking a lead from Wall Street and Europe on Friday, as a plunge in the Argentine peso last week sparked fresh worries about developing nations' economies.
Wall Street extended its losses on Monday, with the Dow falling 0.26%, the S&P 500 down 0.49% and the Nasdaq 1.08% lower. In Europe the main markets in London, Paris and Frankfurt also saw big losses.
There is growing concern that with the Fed on a course of winding down its stimulus programme, the cash that has provided strong investment support for emerging economies - from Argentina and South Africa to Indonesia and India - could dry up, leading to a flight of capital.
Adding to that is a string of weak Chinese data, including last week's dire manufacturing figures, that have raised questions about the world's number two economy, which is a key driver of growth.
Eyes are now on the Fed's latest two-day meeting, which kicks off Tuesday. Despite the latest turmoil, there is speculation it will cut a further $10bn from its monthly asset purchases, to $65bn, following a similar announcement last month.
Kenichi Hirano, market analyst at Tachibana Securities, told Dow Jones Newswires: "There is a lot of confusion over what the Fed may say and, more importantly, how markets will react.
"The Fed needs to be very careful to stick to tapering while not upsetting markets that have gotten so used to cheap, easy money that they don't immediately know what to do without it."
On currency markets, the dollar edged up to ¥102.75 in afternoon Asian trade from ¥102.56 in New York as investors moved back into the unit after it sank to as low as ¥101.77 in Tokyo at one point on Monday.
The euro was also up at ¥140.45 from ¥140.21 and was at $1.3667 against $1.3670.
The single currency was supported by an upbeat report from Germany. The Ifo economic institute said its closely watched German business climate index climbed to 110.6 points in January, up from 109.5 points in December, and that the outlook was the most optimistic in almost three years.
In Japanese trade, electronics giant Sony ended 2.86% lower after Moody's cut its debt rating to junk status, saying it had more work to do in repairing its battered balance sheet.
The move comes less than three months after Sony slashed its full-year profit outlook by 40%, citing weak demand for its digital cameras, personal computers and televisions.
Oil prices rose. New York's main contract, West Texas Intermediate for March delivery, was up 23 cents at $95.95 in afternoon Asian trading while Brent North Sea crude for March gained 32c to $107.01.
Gold fetched $1 256.91 at 08:00 GMT, compared with $1 270.56 late Monday.
In other markets:
-- Wellington eased 0.11%, or 5.36 points, to 4,848.44.
Air New Zealand fell 1.15% to NZ$1.72 and Sky Television slipped 1.19% to NZ$5.82 but Telecom rose 1.27% to NZ$2.395.
-- Manila closed 0.97% lower, giving up 58.80 points to 6,022.81.
Philippine Long Distance Telephone Co. dropped 0.22% to 2,704 pesos but SM Prime Holdings rose 1.36% to 14.86 pesos.
-- Taipei was closed for a public holiday.
