Asia: Markets muted ahead of next week's Fed decision

The Shanghai Composite Index closed down 0.49%, while the Hang Seng lost 0.45%. The Nikkei 225 was down 1.32%.

Seoul was the odd one out for the region, with the Kospi closing up 0.2%. That was a clear response to the Bank of Korea's decision to keep its rate unchanged at 1.5% - a decision which was widely tipped, as the bank chose a wait-and-see approach when it came to the Fed.

New Zealand's S&P/NZX 50 closed down 0.21% after the country's Reserve Bank cut interest rates for a fourth time this year, to a record-equalling low of 2.5%.

In Australia, market predictions were blown out of the water when the Bureau of Statistics posted an unusually high number of new jobs for November. The unemployment rate of 5.8% was the lowest in 20 months, with analysts saying the news would reduce pressure for the Reserve Bank there to reduce rates. The S&P/ASX 200 closed down 0.84%.

This general downturn in Asian equities was put down to investors pocketing their money, in case of any post-Fed rates rise shocks.

"The general sentiment is that they're positioning for next week. The market's trying to get ahead of a possibly volatile reaction", said Evan Lucas, market strategist at IG in Australia.

Federal fund futures weren't hiding anything either, with the CME Group pricing in an 87% probability of a rate increase next week.

"The short-term impact is always negative with rate hikes on the rest of emerging markets, including China, and that still seems to be the case", said Nicholas Yeo of Aberdeen Asset Management.

The People's Bank of China depreciated the yuan against the US dollar for the fourth day running, swatting the reference rate to its weakest level in four years.

But the continued weak oil price environment wasn't affecting producers in the People's Republic, with exports of refined products rising 68% year-on-year in November to 4.1m tons.

"Prices will remain capped until the physical overahng is reduced by either a rise in demand or a fall in supply", said OM Financial client manager Stuart Ive.

Antipodean currencies led the charge against the greenback during the day. The Aussie dollar clawed back yesterday's losses, up 1.01% against the USD, while the Kiwi gained 0.34%. The yen fell 0.06% against the dollar.