Jan 26 (Reuters) - New Zealand shares snapped a five-session losing streak on Wednesday in thin trading volumes, with investors awaiting a U.S. Federal Reserve policy decision for further direction, while Australian markets were closed for a public holiday.

The S&P/NZX 50 index rose 0.5% to 12,185.65 in its best session since Jan. 5. The benchmark fell 0.5% on Tuesday.

The Fed's two-day policy meeting will end later in the day, with market participants awaiting further clues on the timing and pace of interest rate hikes.

New Zealand raised rates twice towards the end of 2021 to cool its red-hot property market.

The country last week imposed new restrictions, including mask rules and gathering limits, to slow the community spread of the COVID-19 Omicron variant.

Construction firm Fletcher Building gained 1.7% in its best day since late December. Air New Zealand rose 1.1% after two days of falls, while Auckland International Airport advanced 1.8% in its second straight session of gains.

Bucking the trend, a2 Milk dropped 2.4%, trimming gains seen in the previous session following a report that suggested the dairy firm could be a buyout target.

Australian markets were shut on account of the Australia Day holiday and will reopen on Thursday after the Fed decision. The benchmark ASX 200 had closed 2.5% lower on Tuesday.

(Reporting by Upasana Singh in Bengaluru; Editing by Subhranshu Sahu)