Asian markets mixed as leaders from China, Japan and South Korea meet

Japan's Nikkei 225 (N225) was slightly lower, while South Korea's Kospi (KOSPI) lost 0.4%. But China's Shanghai Composite (SHCOMP) rose 0.2%.

Hong Kong's Hang Seng Index (HSI) dropped 0.3% during a shortened trading session. The market will close early Tuesday afternoon for the Christmas holiday and reopen Friday.

The meeting between three of Asia's top executives is happening at the close of a tense year, particularly for the relationship between Japan and South Korea. A trade spat between the two countries escalated into a military dispute over the summer. Seoul eventually said it would hold off on scrapping its military intelligence sharing agreement with Tokyo, lessening tensions somewhat. But trade remains an issue.

Tensions elsewhere on the Korean Peninsula may also be on the minds of leaders at the summit. Earlier this month, North Korea issued a veiled warning that it would send a "Christmas gift" to the United States, which a source familiar with the North Korean leadership said will likely be a new, hard-line approach in dealing with Washington.

Chinese President Xi Jinping, meanwhile, said Monday in Beijing that he hopes to improve economic and trade ties with Japan and South Korea, according to the Chinese government.

Xi's remarks came one day after China announced it will reduce import tariffs on hundreds of goods next week as it tries to boost trade and shore up its slowing economy.

Chinese Premier Li Keqiang also said Monday that Beijing is considering cutting reserve requirement ratios for banks in order to ease funding difficulties for small firms and increase economic growth.

— CNN's Will Ripley contributed to this report.

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