A Standard and Poor's decision to put Hong Kong's sovereign ratings on creditwatch pared gains in the territory's bourse despite a nearly six billion dollar economic stimulus package unveiled by the government.

Elsewhere, concerns over a lack of follow-up action by Japan to boost the yen and domestic economic worries depressed investor sentiment. "The Japanese seem to be waffling and everyone is wondering whether they'll follow through (to stabilise the yen)," a foreign analyst with a Bangkok brokerage said. "Until there's some direction there's really zero interest in Asia. The Thai government is plodding along - they don't seem to be doing much to encourage investors."

Japanese share prices closed 1.7 per cent lower on persistent concerns about the financial system, brokers said. But troubled Long-Term Credit Bank of Japan Ltdbounced back after the government appeared to offer a supporting hand.

The bank, weighed down by heavy bad loans and a sudden loss of investor confidence, is desperately looking for a merger partner, reports said. But no other bank appears willing to take on the burden. Finance minister Hikaru Matsunaga tried to reassure doubters. "At present, the bank's daily operations are in a smooth state and the ministry has not received requests or a report for a merger or support," he told a news conference. But dealers still warned the struggling bank was far from saved.

The Nikkei-225 selected issues on the Tokyo Stock Exchange fell 254.49 points to end at 15,054.60. The Topix of all issues on the first section lost 11.89 points to 1,175.42.

Hong Kong: Hong Kong share prices rose 0.2 per cent in mixed trading after the government unveiled a new economic stimulus package, dealers said. But gains were pared by a decision by US ratings agency Standard and Poor's to put Hong Kong's sovereign ratings under anegative creditwatch.

"The government's rescue package has helped the market, but sentiment has been overruled by concerns over the decision by Standard and Poor's to put Hong Kong on creditwatch with negative implications," said Sean Li, associate director at Amsteel Securities.

Li also said there were still lingering concerns over a possible spike-up in interest rates due to the volatility of the Japanese yen. The key Hang Seng index gained 15.46 points to close at 8,219.67, after diving 4.51 per cent in the previous day's trade. Singapore: Singapore share prices ended 1.5 per cent lower amid persistent bearish market sentiment and the absence of fresh leads. "The market looked okay in the morning but after half a day of trading, it moved lower, indicating perhaps that the rise last week was too sharp and a correction is in order," a dealer with a local brokerage said.She said investors were also nervous about holding positions in view of the vulnerable yen and other Asian currencies as well as thebleak regional economic scenario.

The benchmark Straits Times Industrials index of the Stock Exchange of Singapore fell 16.20 points to end at 1,082.25 while the broader All-Singapore index dropped 3.96 points to 302.41.

Kuala Lumpur: Malaysia's key stock index ended 0.1 per cent lower in thin trade on Tuesday as light late bargain hunting offset selling pressure in the absence of positive leads. "Investors are cautious due to lack of fresh leads as fears that the economy may hit negative growth for the second quarter seems to rattle the market," a dealer with a local brokerage said. The Kuala Lumpur Stock Exchange's 100-share weighted composite index fell 0.36 POints to close at 457.25.

Bangkok: Thai stocks slipped 0.7 per cent into the red at the close, losing earlier gains to uncertainty over regional currencies, analysts said. Analysts said speculative buying in the morning faded in the afternoon session and pessimism about the outlook for the Japanese economy took oversentiment.

"People are wondering about currency movements and foreign investors are stepping back and waiting for direction before they place their bets one way or another," a foreign analyst with a local brokerage said.

The Stock Exchange of Thailand (SET) composite index dropped 1.84 points to 274.06, while the SET-50 selected index eased 0.12 points to 18.51.

Jakarta: Jakarta shares climbed 0.6 per cent following lower interests rates in some banks and positive sentiment over possible International Monetary Fund (IMF) rescue aid disbursement, dealers said. "There was an overall positive market sentiment on the news that the IMF might disburse the aid soon," a dealer with a regional brokerage said.The Jakarta Stock Exchange composite index closed up 2.426 points at 423. 085. Turnover totalled 166.2 million shares valued at 151.8 billion rupiah (US$ 10.3 million).