Tokyo weaker ahead of Fed decision

The Tokyo market is waiting for the Koizumi-Bush meeting at the weekend

TOKYO, Japan -- Tokyo stocks opened lower on Wednesday on nervousness about high tech stocks and the expected cut in U.S. interest rates.

The benchmark Nikkei 225 average was down 0.2 percent or 26.42 points at 12,951.65, while the capital-weighted TOPIX index fell 2.3 points to 1,293.62.

Elsewhere in the region, the Australian market slipped, with the S&P/ASX200 down almost 25 points or 0.7 percent to 3409.4. Bluechip banks and resources stocks were weaker.

In Seoul, the Kospi was down 5.34 points to 583.27, while Taiwan's Taiex made good gains, picking up 61 points to 4846.13. In Tokyo, worries about the outlook for high-tech earnings outweighed an uplifting effect from Nasdaq gains, pushing down tech stocks such as Tokyo Electron.

Key events coming up

Key economic and political events toward the weekend -- when prime minister Junichiro Koizumi is to meet U.S. president George Bush -- are discouraging investors from taking bold moves either way.

The U.S. Federal Reserve is expected to announce its sixth interest rate cut so far this year when its open markets committee meeting ends on Wednesday.

"Overall, investors are in a wait-and-see stance ahead of the Fed's verdict. They want to see the outcome and hear (Federal Reserve Chairman Alan) Greenspan's comments before taking positions," said Yutaka Miura, deputy manager of the equity information section at Shinko Securities.

Tokyo Electron, a major maker of semiconductor-manufacturing equipment, fell 2.54 percent to 7,290 yen and Advantest Corp, a top manufacturer of semiconductor testing devices, slid 1.98 percent to 10,870 yen.

Sony up, despite profit revision

Worries over profit warnings from Japanese technology firms were rekindled on Tuesday when Merrill Lynch cut its operating profit estimates for Sony Corp for the April-June quarter to 30 billion yen ($242.5 million) from 50 billion yen.

The brokerage said the revision reflects the effects of a cellphone handset recall and worse-than-expected stagnation in the Japanese PC market.

Sony shares, however, bounced up 0.86 percent to 8,250 yen after sliding almost six percent in the previous two sessions.

The Fed's decision will be followed by the Bank of Japan's policy-setting meeting on Thursday and then the Koizumi-Bush talks.

Reuters contributed to this report.