HONG KONG (AP) — Asian stock markets were modestly mixed Thursday, with Japan shares fluctuating amid growing speculation the country's central bank would soon cut interest rates to revive its contracting economy. The lackluster trade came after Wall Street dipped as early enthusiasm about the Federal Reserve's historic rate cut gave way to concerns that a turnaround in the U.S. economy was still far off. In Tokyo, the Nikkei 225 stock average was up 32.19 points, or 0.4 percent, at 8,644.71 after flitting in and out of negative territory. Hong Kong's Hang Seng Index lost about 0.9 percent to 15,326.59. Advertisement Benchmarks in Australia, South Korea and mainland China edged higher, while those in Singapore and the Philippines declined. The dollar recovered slightly from 13-year lows against the yen, and oil prices slid to 4 1/2-year lows below $40 a barrel. "This is not the start of a bull market, it's still a bear market rally," said Francis Lun, general manager of Fulbright Securities Ltd. "The economy is still in the doldrums, and I think people are thinking the zero interest rate policy is due to a long recession ahead." The U.S. rate cut has raise expectations the Bank of Japan will follow suit and slash its key rate to nearly zero when it wraps up a two-day meeting Friday. Goldman Sachs predicts the bank will shave its overnight call rate target from the current 0.3 percent to 0.15 percent, while JP Morgan forecasts a cut to 0.1 percent. Financials gained on the speculation, with megabank Mitsubishi UFJ Financial Group Inc. adding 2.1 percent. Sumitomo Mitsui Financial Group Inc., Japan's second-largest by market value, soared 7 percent. Meanwhile, Honda dropped 3.4 percent a day after Japan's No. 2 carmaker said it was slashing its annual profit forecast due to the global slowdown. In China, a new stimulus package unveiled Wednesday to boost the country's slumping real estate market lifted shares in property firms. China Overseas and China Resources rose more than 2 percent in Hong Kong trade.

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