Asia stocks lower on caution over Fed meeting

TOKYO (AP) — Asian stock markets were mostly lower Tuesday as investors played it safe ahead of a potentially pivotal Federal Reserve meeting.

KEEPING SCORE: Tokyo's Nikkei 225 slipped 0.3 percent to 15,895.32 while South Korea's Kospi gained 0.4 percent to 2,043.31. Hong Kong's market was closed in the morning due to a typhoon warning, though the alert level was later downgraded and trading was expected to begin in the afternoon. Australia's S&P/ASX 200 lost 0.2 percent to 5,461.90. Markets in Taiwan, Singapore and Indonesia also fell.

FED WATCH: Fed policy makers start a two-day meeting on Tuesday that many investors expect will bring it closer to raising its key interest rate as the economy strengthens. The Fed has held the rate close to zero for more than five years, and stocks have surged against that backdrop.

THE QUOTE: "Speculation that the Fed will commence their tightening cycle sooner than expected has been the key driver across most markets over the past week or so," William Leys of CMC Markets said in a commentary. "However, at this stage, the Fed's apparent hawkish revision is just conjecture and there are no certainties."

SCOTLAND'S CHOICE: The British pound has turned volatile in recent weeks as opinion polls narrowed ahead of Thursday's independence referendum in Scotland, which could spark a sizeable panic in U.K. markets. On Monday, the pound was 0.2 percent lower at $1.6231.

WALL STREET: The Dow Jones industrial average rose 0.3 percent to 17,031.14, while the Standard & Poor's 500 dropped 0.1 percent to 1,984.13. Investors are cautious over a possible shift by the U.S. central bank. Higher interest rates would mean higher borrowing costs for companies and consumers, cutting into profits and spending money.

CURRENCIES: The euro rose to $1.2945 from $1.2939 late Monday. The dollar rose to 107.12 yen from 107.10 yen.

ENERGY: Benchmark U.S. crude was down 16 cents to $92.76 in electronic trading on the New York Mercantile Exchange. It gained 65 cents to $92.92 a barrel on Monday.