Japan's Nikkei stock average abandoned early gains to slip 0.2 per cent this morning to its lowest close in three months as the impact of emergency US moves to help troubled home financing providers faded and lenders such as Mitsubishi UFJ Financial Group fell back.
But falls were limited by gains from steelmakers such as JFE Holdings which said it may raise prices, while trading houses were solid on continuing high oil prices.
Another strong gainer was Nisshinbo Industries Inc which climbed after a newspaper reported the firm developed a technology to use carbon instead of platinum as the electrode catalyst for fuel cells a move to save costs.
Mitsubishi UFJ and other banks initially rose sharply after the US Treasury and Federal Reserve unveiled sweeping measures to support Fannie Mae and Freddie Mac if needed, to bolster confidence in the troubled mortgage financing giants.
But investors locked in profits on banks later before stepping to the sidelines to wait for US trade.
"This news was completely fresh when it broke during Asian time, and US markets haven't had a chance to factor it in yet," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
"The real question is how Wall Street will respond, and ahead of this nobody can really buy actively," he said.
Others said the rescue plan alone is hardly enough to completely erase long-term worries about the economy and inflation, particularly with oil prices remaining relatively high.