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January 31 2013, 9:28PM

Asian markets have closed mixed, with late buying offsetting earlier falls that had been fuelled by losses on Wall Street as US data showed the economy shrank in the final three months of 2012.

The surprise numbers from Washington, the first contraction since mid-2009, saw the US dollar weaken further after suffering a sell-off in New York trade.

Tokyo rose 0.22 per cent, or 24.71 points, to 11,138.66 and Shanghai added 0.12 per cent, or 2.95 points, to 2,385.42 on Thursday. But Seoul slipped 0.13 per cent, or 2.49 points, to 1,961.94 and Sydney lost 0.37 per cent, or 17.9 points, to 4,878.8.

Hong Kong shed 0.39 per cent, or 92.53 points, to 23,729.53.

Most of the region's indexes have enjoyed a strong month as dealers grow more confident about the global outlook, with Sydney enjoying its best January since 1994.

Investors were surprised by the US Commerce Department figures showing the world's biggest economy shrank at an annual rate of 0.1 per cent in the October-December quarter. Forecasts had been for a 1.0 per cent rise.

However, the Federal Reserve, wrapping up a two-day policy meeting, dismissed the contraction as "transitory", noting the economy had "paused" in recent months.

The Fed stayed the course on its ultra-loose monetary policy as expected, saying growth should be moderate moving ahead.

On Wall Street the Dow, which ended Tuesday just short of its all-time high, fell 0.32 per cent, while the S&P 500 shed 0.39 per cent and the Nasdaq slipped 0.35 per cent.

SMBC Nikko Securities general manager of equities Hiroichi Nishi told Dow Jones Newswires: "The (US) numbers will likely be treated as a bit of a one-off, as they masked stronger consumer and business spending and progress in the housing recovery."

On currency markets the greenback bought Y90.90 in afternoon Asian trade, from Y91.05 late on Wednesday in New York. The US unit is well down from the Y91.40 seen earlier on Wednesday in Asia.

The euro was at Y123.12 and $US1.3547 against Y123.54 and $US1.3564.

In, Japan the government released figures showing factory production rose 2.5 per cent in December month-on-month.

Despite coming up short of expectations of a 4.0 per cent rise, the economy ministry said the data indicated "industrial production shows signs of having bottomed out".

Oil prices fell, with New York's main contract, light sweet crude for delivery in March, down 12 US cents to $US97.82 a barrel. Brent North Sea crude for March delivery lost 10 US cents to $US114.80 in the afternoon.

Gold was at $US1,676.68 at 1910 AEDT, compared with $US1,666.55 late on Wednesday.

In other markets:

- Taipei rose 0.22 per cent, or 17.04 points, to 7,850.02.

Leading smartphone maker HTC was 0.52 per cent higher at $Tw291.5 while Hon Hai Precision shed 0.59 per cent to end at $Tw84.4.

- Manila closed 0.45 per cent lower, shedding 28.49 points to 6,242.74.

Philippine Long Distance Telephone Co dropped 2.0 per cent to 2,786 pesos and Metro Pacific Investment which was down 0.38 per cent at 5.20 pesos.

- Wellington rose 0.12 per cent, or 5.10 points, to 4,252.65.

NZ Oil & Gas gained 1.7 per cent to $NZ0.91, Fletcher Building added 1.4 per cent to $NZ9.52 and Air New Zealand was up 0.40 per cent at $NZ1.25 while Telecom climbed 1.25 per cent to $NZ2.43.

By Danny McCord