Tokyo unchanged ahead of rate move

Tech stocks such as NEC lost ground in Tokyo on Wednesday

TOKYO, Japan -- Tokyo stocks closed the morning session basically unchanged Wednesday after gains in banking issues offset losses in high-tech issues such as NEC.

The benchmark Nikkei 225 average ended the morning down 2.12 points or 0.02 percent at 12,976.70, while the capital-weighted TOPIX index edged up 0.07 percent to 1,296.83.

Elsewhere in the region, markets in Australia and Korea slipped, but Hong Kong and Taiwan made gains.

Australia's S&P/ASX200 index finished the morning 20.8 points or 0.5 percent lower at 3413.40. Bluechip banks NAB and CBA were both weaker, while brewer Foster's fell 1.4 percent after it announced a $180 million share issue.

Kospi down on tech weakness

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In Seoul, the Kospi fell 4 points to 584.71. Tech stocks SK Telecom, Hynix Semiconductor and Samsung Electronics were all weaker.

In Japan, investors were waiting for the outcome of the U.S. Federal Reserve's interest rate-setting Federal Open Market Committee that ends later on Wednesday, and the weekend meeting between Japan's Prime Minister Koizumi and President Bush of the U.S.

"The market is in one of those situations where people cannot chase prices higher or lower, with the FOMC and the U.S.-Japan summit meeting dangling in front of us," said Takashi Miyazaki, senior strategist at UFJ Partners Asset Management, which manages 3.18 trillion yen of investment trusts.

Technology stocks came under pressure amid renewed worries about the outlook for high-tech earnings.

Chip testing device maker Advantest was down 3.97 percent to 10,650 yen and Tokyo Electron Ltd, a maker of semiconductor-manufacturing equipment, slipping 3.34 percent to 7,230 yen.

Sony rebounds, despite earnings revision

Merrill Lynch cut its operating profit estimates for Sony Corp for the June quarter to 30 billion yen ($242.5 million) from 50 billion yen.

But Sony shares bounced up 1.59 percent to 8,310 yen after sliding almost six percent in the previous two sessions.

Tokyo Gas, Japan's largest gas utility, gained 0.52 percent to 386 yen after rising as high as 388 yen, the highest intraday level since July 1996.

Banking issues were mostly higher, with Daiwa Bank Ltd leading the pack with a gain of 5.71 percent to 148 yen.

Reuters contributed to this report.