Asian markets mostly rose on Thursday following big gains in the previous session but investors are growing nervous that US leaders have still not agreed a deal to avert the fiscal cliff.
The yen slipped a tad against the euro and dollar after Japan's central bank unveiled more huge monetary easing but it held on to earlier gains as traders had mostly expected the new measures.
Tokyo fell 1.19 percent on profit-taking after surging to an eight-month high on Wednesday. The index lost 121.07 points to 10,039.33 -- a day after breaking the 10,000 barrier for the first time since early April.
Seoul closed 0.32 percent higher, adding 6.41 points to 1999.50, with the election of conservative Park Geun-hye seeming to have little effect, although dealers were broadly happy as she favours stability over big change.
Sydney was up 0.35 percent, or 16.3 points, at 4,634.1 and Hong Kong staged a late rally to end 0.16 percent higher, adding 36.41 points to 22,659.78 while Shanghai gained 0.28 percent, or 6.11 points, to 2,168.35.
With less than two weeks to go before the fiscal cliff of huge tax hikes and deep spending cuts is due to take effect, US lawmakers have still not reached a compromise budget deal to cut the nation's deficit with less painful measures.
President Barack Obama said Wednesday he and the Republicans had narrowed differences to "a few hundred billion dollars". But a deal remains elusive.
Republicans are loath to raise taxes, while Democrats do not want to cut spending on programmes such as Medicare.
House Speaker John Boehner, the Republican negotiating with the president, has said he is willing to extend tax breaks for everyone earning less than $1 million per year. Obama has said, however, he is willing to go no higher than $400,000.
Boehner announced Wednesday that he will move to pass his measure, which he describes as his "Plan B", through the House Thursday but Obama warned he would veto the legislation.
"At some point there's got to be... a recognition on the part of my Republican friends that, you know, take the deal," Obama told reporters, as the two sides struggled to reach agreement.
While both sides have rejected the other's offers for a deal they said that talks are ongoing.
However, US traders were not impressed. On Wall Street the Dow finished 0.74 percent lower, the S&P 500 dropped 0.76 percent and the Nasdaq lost 0.33 percent.
The Bank of Japan said Thursday it would expand an asset-buying programme by 10 trillion yen ($119 billion) to 101 trillion yen, days after the country's conservatives won an election promising to boost spending and pressure the bank for aggressive action.
It made no mention of a two-percent inflation target demanded by incoming prime minister Shinzo Abe but said it would look at reviewing its policy.
The last scheduled policy meeting of the year had been widely seen as a test of whether it would stand pat, shrugging off the outside pressure.
However, it said the new measures were tied to fears about the slowing global economy, which was hurting growth at home.
The yen, which has tumbled against the dollar and euro in recent weeks on the expected victory for the opposition, picked up slightly in early trade Thursday and managed to hold on to the gains after the BoJ move.
In early European trade the greenback bought 83.93 yen, compared with 84.39 yen in New York late Wednesday, while the euro was at 111.02 yen, from 111.59 yen.
The single currency also fetched $1.3228, against $1.3226.
Oil prices were lower, with New York's main contract, light sweet crude for delivery in February dropping 37 cents to $89.61 a barrel in the afternoon and Brent North Sea crude for February dipping 43 cents to $109.93.
Gold was at $1,668.30 at 10.30 GMT compared with $1,674.39 late Wednesday.
In other markets:
-- Singapore closed up 0.54 percent, or 16.95 points, at 3,175.52.
Singapore Telecom rose 0.60 percent to Sg$3.37 and DBS Group gained 0.54 percent to Sg$14.99.
-- Taipei fell 1.07 percent, or 82.01 points, to 7,596.46.
Taiwan Semiconductor Manufacturing Co. was 1.34 percent lower at Tw$96.0 while leading smartphone maker HTC rose 0.36 percent to Tw$275.5.
-- Manila added 0.79 percent, or 45.35 points, to 5,797.74.
-- Wellington ended 1.30 percent higher, adding 52.45 points to 4,075.45.
Chorus surged 4.4 percent to NZ$2.84, Fletcher Building rose 2.2 percent to NZ$8.45 and Telecom gained 0.74 percent to NZ$2.32 but Xero shed 1.3 percent to NZ$7.60.
-- Bangkok shed 0.07 percent or 1.00 points to close at 1,377.40.
Coal producer Banpu fell 1.42 percent or 6.00 baht to 418.00 baht while PTT Plc was unchanged at 333.00 baht.
-- Jakarta ended down 21.04 points, or 0.49 percent, at 4,254.82.
Carmaker Astra International fell 2.60 percent to 7,500 rupiah, cigarette maker Gudang Garam lost 2.73 percent to 57,000 rupiah, while palm oil producer Astra Agro Lestari decreased 1.62 percent to 18,250 rupiah.
-- Kuala Lumpur shares gained 4.96 points, or 0.30 percent, to close at 1,670.60.
British American Tobacco added 1.7 percent to 60.50 ringgit, DiGi.com rose 1.5 percent to 5.36 and Axiata climbed 1.2 percent to 6.68.
India's Sensex index slid 0.11 percent or 22.08 points at 19,453.92 points, snapping two straight days of gains, on profit-taking in index heavyweights.
India's auto and tractor giant Mahindra and Mahindra fell 1.68 percent to 951.7 rupees while IT outsourcer Wipro fell 1.32 percent to 380.5.
-- Dow Jones Newswires contributed to this story --