Chinese stocks ended lower Friday amid interbank rate volatility, while the rest of Asia was mixed as traders continued to digest the Federal Reserve's decision to cut back its stimulus plan. The reaction to the Feds` announcement to finally cut its $85 billion monthly bond purchases by $10 billion early next year was a bit mixed before the weekend. Wall Street sticks near record highs but Chinese stocks record their worst losing streak in nearly two decades. On the currency front, the dollar was stronger, while the Japanese yen fell to fresh five-year lows. Most notably, Shanghai composite index slumped 2.02% settling at 2,084.79, the lowest close in almost four months. The benchmark has been heading south for nine consecutive sessions, its worst losing streak in 19 years. The slump in Shanghai stock market was stoked by growing fears about another credit crunch, with China`s money market rates soaring for a third day, as banks continue to struggle to raise funds in the interbank market. The rates have been shooting higher in recent week, however the borrowing costs initially fell early Friday after the People`s Bank of China (PBoC), having refrained from adding cash to the system for two weeks straight, said Thursday that it had "recently" injected cash to try to ease stress, but rates later resumed way north. On a broader scale, the volatile trade is still evident as the year comes to an end, with traders holding grounds in anticipation of policy changes from the central banks of the world`s three biggest economies; US, China and Japan . The latest was the Fed`s move to taper its quantitative easing program, a step that was broadly speculated since mid-2013, and now it becomes real! In Japan , stocks markets tumbled following a sharp jump, with the Nikkei 225 ending little changed at 15,870.42 after enjoying a sharp rise due to the Fed`s outcome. Australia's S&P/ASX 200 rose 0.8% extending gains at the close, while South Korea`s Kospi rallied 0.39% settling at 1,983.35.
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