The market was lifted by gains in a string of companies that announced restructuring plans, but traders said any upside was going to be capped as corporate Japan unwinds cross-holdings ahead of the fiscal year end on March 31. The yen had a choppy day against the dollar, rising to 122 in the morning before falling back to 120.44/49 at 1000 GMT.

Despite continued strength in Hong Kong's HSBC Holdings -- the market's biggest point-gainer for the third straight day -- the Hang Seng ended 0.2 per cent down at 9,658.07. ``I think the outlook for US interest rates staying high ismaking people a little bit cautious on the property sector and is preventing investors from jumping into the market,'' said Sunny Chan of Seapower Securities.

Australia's All Ordinaries caught Wall Street's chills, dropping one per cent to end just above the key 2,900 support level at 2,904.8. Australian traders also cited strength in the US bond market as a negative factor for domestic stocks. Singapore ended little changed, 0.05 per cent down at 1,410.22 in thin trade, as the market slowed ahead of Friday's budget. Traders said sentiment was boosted by the release of better-than-expected 1998 GDP growth figures of 1.5 per cent. The Taiwan Weighted was boosted by foreign funds buying into integrated circuit stocks, and ended 0.59 per cent higher at 6,275.53. Seoul's KOSPI recorded a small rise of 0.14 per cent to end at 499.14 on the back of easing interest rates and strength in the futures markets, but traders said market sentiment was still downbeat. ``The market looks to be heading downwards afterthis small recovery as selling sentiment still prevails among retail investors,'' said Yoon Sam-wi of LG securities. New Zealand's Top-40 ended down 0.72 per cent at 2,190.35, more evidence of the weight of Wall Street's fall on Asian markets.

Kuala Lumpur fell sharply early in the day before recovering slightly to end down 0.7 per cent at 549.24 after bargain hunters stepped in on expectation of reasonable half-year results later in the evening from Maybank. Jakarta stocks were dragged down by profit-taking in blue chips and a lack of foreign interest. The composite index slipped 1.04 per cent to end at 397.8. Thailand's SET Index dropped 1.04 percent to end at 332.67. The Philippines Composite ended up 0.61 per cent at 1,934.11 after a weak start.Traders said bargain-hunting in bluechips, led by Philippine Long Distance Telephone Co, lifted the index.