Asia report: Shanghai closes at lowest level in more than a year

Asia chopped around on Thursday, but China well and truly tumbled, with its main benchmark closing at its lowest level in well over a year.

The Shanghai Composite Index fell 2.92% to 2,655.66 - its lowest close since November 2014 - with late trading bringing in most of the losses.

Shanghai was well inside the ball park of a 50% loss since the pre-crash peak last June. After Thursday's close, it was sitting 48.6% down since then.

Four weeks into 2016 it had already lost 25% as well, taking it down the path towards the worst monthly performance since October 2008.

The technology-centric Shenzhen Composite fell 4.2%, and the ChiNext lost 4.6%.

Investors still appeared worried by capital flows out of the mainland as the Chinese economy slowed, even though there was mounting evidence that Beijing was working behind the scenes to stem any outflows.

Elsewhere in the region, the Hang Seng Index closed up 0.75%, while Tokyo's Nikkei Stock Average was down 0.71%. Seoul's Kospi was up 0.48%.

In the antipodes. the S&P/ASX 200 was up 0.6%, while the S&P/NZX 50 closed up 0.13%.

It was the possibility of the US Federal Reserve raising interest rates in March that was triggering the choppy trading in Asia. Data from CME Group showed investors and traders were picking a 29% likelihood of a rate increase at the March Fed meeting.

That was down from 34% before the Fed's statement on Wednesday, in which it signalled a March increase was still an option.

China also appeared to have taken cues from the US markets overnight, where the S&P 500 fell 1.09% after the Fed statement. The central bank didn't quite go as far as saying the current economic and commodities climate was pushing the world towards muted activity and lower inflation.

In Beijing, the People's Bank of China injected the largest amount of cash into the country's financial system in nearly three years, offering CNY 340bn (£36.11bn) in short term loans to commercial banks in what was otherwise a routine money market operation.

The move followed CNY 440bn through similar means on Tuesday. The central bank usually offers the loans - known as reverse repurchase agreements - twice weekly, though not usually at such eye-watering levels.

"The large amount of cash shows [the central bank's] firm determination to maintain accommodative money-market conditions, and to use short-term tools to boost liquidity", said Standard Chartered senior rates strategist Becky Liu.

Oil continued its claw-back above the $30 mark, with Brent Crude sitting at $33.59 at 1050GMT - up 1.46% - and West Texas Intermediate up 0.8% to $32.56.

In currencies, the yen was almost unchanged against the dollar as many investors kept their cash in their pockets ahead of a much-anticipated Bank of Japan decision on Friday, with concerns the central bank would go ahead with more of its controversial easing policy.

"We expect no easing. It's too early to ease in January. We can't think of easing as a main scenario now", said Merrill Lynch Japan chief FX strategist Shusuke Yamada.

The yen was slightly weaker against the greenback at 1030GMT, up 0.13% to JPY 118.83.

One US dollar was worth AUD1.4120, with the Aussie 0.79% stronger, and NZD1.5458 - the Kiwi strengthening by 0.59%.