CME CME Group Inc

Trading in Asian shares was choppy Thursday, as investors weighed the U.S. Federal Reserve's latest statement that it is monitoring global economic and financial developments ahead of its March decision on interest rates.

Hong Kong's Hang Seng Index was near flat, while Australia's S&P/ASX 200 turned positive, last up 0.6%.

The Nikkei Stock Average and South Korea's Kospi pared losses to trade essentially flat.

Meanwhile, the Shanghai Composite Index was recently down 0.5% at 2723.64, near its lowest levels since December 2014, as investors worry about China's slowing economy and increasing capital outflows.

The possibility of the Fed increasing interest rates in March was unnerving investors throughout Asia. A longstanding policy of low interest rates has driven a rally in stocks world-wide since the financial crisis.

The S&P 500 fell 1.1% on Wednesday after the central bank stopped short of saying that recent economic and financial developments could restrain economic activity and push down inflation. A 13% loss in U.S. oil prices this year has raised questions about the outlook for already low inflation and added a sense of general uncertainty in markets.

Still, federal-fund futures, used by investors and traders to place bets on central-bank policy, showed Wednesday that they expect a 29% likelihood of a rate increase from the Fed at its March meeting, according to data from CME Group. The probability was 34% before the Fed's Wednesday statement

China shares were lower for the third straight session, even as authorities appear to be ramping up efforts to halt money outflows, Yesterday, the Shanghai Composite Index recovered steep losses late in the session to finish down slightly. Some analysts attributed the late-day surge to buying by large Chinese institutions like mutual funds, or to coordinated buying by state-owned funds tasked to support shares.

On Thursday, Japanese shares were also down as the Japanese yen strengthened, which hurts the competitiveness of the country's exporters.

The yen was up 0.1% at ¥ 118.75 to the U.S. dollar, compared with the previous day.

Brent crude oil was down 0.8% at $33.66.

Saumya Vaishampayan contributed to this article.

Write to Chao Deng at Chao.Deng@wsj.com

(END) Dow Jones Newswires

January 27, 2016 22:15 ET (03:15 GMT)

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