Looming FOMC meeting keeps Asian stocks on edge 

Asian stocks see-sawed on the final trading day of the week, as investors eyed increased uncertainty heading into the Federal Reserve‘s crucial meeting on interest rates next week.

The Fed is widely expected to raise its near-zero interest rate as early as next week amid improving economic fundamentals in the U.S. But an abrupt devaluation of the yuan by Chinese authorities in August and renewed turmoil in global markets has had some market watchers paring back their forecasts.

Overnight, Wall Street finished higher on the back of a bounce in oil prices and major stocks such as Apple. The tech-heavy Nasdaq Composite led gains with a 0.8 percent rise. The Dow Jones Industrial Average and the S&P 500 closed up 0.5 percent each.

Meanwhile, markets in Singapore are closed on Friday as the Southeast Asian city-state holds its most widely-contested elections since independence 50 years ago.

Nikkei flat

Japan’s Nikkei 225 index fluctuated from modest gains and losses throughout the trading day, as traders looked ahead to next week’s key central bank meetings.

“Japanese markets are intimately focused on the outcome of two major central bank meetings: The Fed and the Bank of Japan’s (BOJ) at the end of October. If the Fed fails to hike next week, the yen looks set for noticeable strengthening. However, the decline of second-quarter gross domestic product (GDP) amid a slew of other weakening data appears to be resetting the calculus for the BOJ,” IG market analyst Angus Nicholson wrote in a note.

Blue-chip exporters including Toyota Motor slumped 1.4 percent, whileToshiba doubled losses to 3.9 percent after the Nikkei business dailysaid that reported that Japan’s Securities and Exchange Surveillance Commission (SESC) is preparing to launch an investigation into accounting irregularities at the troubled conglomerate.

Index heavyweights witnessed choppy trade; SoftBank meandered between gains and losses, and was last seen 0.6 percent lower. Fast Retailing erased early declines to rebound 1.8 percent, but Fanucdropped more than 2 percent.

Financials saw a pick-up in buying interest, after being sold-off intensively in the previous session. Mitsubishi UFJ Financial Group andSumitomo Mitsui Financial Group advanced 1.2 and 0.7 percent respectively, while Nomura Holdings rallied 1.8 percent.

Shanghai Comp flat

China’s Shanghai Composite index headed off for a lunch break by stepping slightly into negative territory.

Other major indexes in the country mirrored the choppy movements in the benchmark index. The CSI300 Index — which tracks the country’s largest publicly traded companies — pared gains to slip 0.2 percent, while the Shenzhen Composite edged up 0.2 percent.

Traders may turn their attention to the raft of economic indicators scheduled for release over the weekend, for more clues to the health of China’s economy.

Retail sales in the mainland is seen holding steady in August at 10.5 percent, according to a Reuters poll, while industrial output is expected to have gained some traction, rising 6.4 percent on year in August, from 6.0 percent in July.

“Industrial production will probably continue to soften especially in industries such as construction where the housing market is impacting,” Emily Dabbs, economist at Moody’s Analytics, told CNBC.

Fixed asset investment is forecast to have decelerated to 11.1 percent in the first eight months of the year from the same period in 2014, compared with 11.2 percent in January-July, the Reuters poll showed.

ASX slips 0.2%

Australia’s S&P ASX 200 index turned negative yet again in late-day trading, on the back of jittery sentiment.

National Australia Bank erased losses to move up 0.7 percent, but shares of Australia and New Zealand Banking and Westpac notched down modestly. Commonwealth Bank of Australia sought a trading halt early Friday, pending the undertaking and completion of a retail bookbuild.

Woodside Petroleum and Oil Search, which are involved in an $8 billion all-share takeover plan, underperformed the energy sector by losing 1.2 and 0.5 percent, respectively. Santos advanced 0.9 percent, finding support from a 4 percent spike in energy prices overnight.

Kospi drops 0.8%

South Korea’s Kospi index declined as the Bank of Korea decided tokeep its policy interest rate unchanged early Friday, in line with expectations.

Meanwhile, profit-taking among investors, notably foreigners, also kept the bourse on the back foot. According to Reuters, foreign traders offloaded a net 46.5 billion won ($39.31 million) worth of shares in the main board by mid-day, on course to extend their selling spree into the 27th straight session.

Among laggards, heavyweight components such as Posco, Kepco andSamsung Electronics lost between 1 and 2.3 percent.

Chipmaker SK Hynix and LG Display eased more than 1 percent, while consumer discretionary plays also weighed on the bourse, with retailers such as Lotte Shopping and Shinsegae down 1.4 and 2.6 percent, respectively.

KLCI sheds 0.5%

Malaysian shares dipped on Friday, with investors on tenterhooks ahead of the Bank Negara Malaysia’s policy decision due at 6.00pm local time.

The central bank is expected to keep the benchmark rate steady at 3.25 percent, economists polled by Reuters said.

All 13 economists were unanimous that the central bank will not change its overnight policy rate (OPR), due to risks posed to Malaysia’s economic growth by lower commodity prices, capital outflows, the weakened ringgit and a potential rate hike by the U.S. Federal Reserve.

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