BALTIMORE, NOV. 18 -- Amid swirling smoke and ancient chants, a massive, 33-foot wooden Buddha was unveiled today -- a symbol of what sponsors hope will be improved U.S.-Japanese relations.

The largest statue of its sort in the world, the fearsome incarnation of Buddha glared at a crowd of several hundred as two dozen monks and assistants chanted and shouted, blew conch shells, brandished swords and shot arrows into the air to ward off evil spirits.

In a blazing finale, monks lit a bonfire of cedar branches. Thick gray smoke billowed over the crowd as people tossed inscribed wooden sticks bearing wishes into the flames.

"I hope this statue will protect Baltimore's people from misfortune forever," said Katsuhiro Shinohara, cultural attache from the Japanese embassy in Washington, one of several officials attending the ceremony.

The unfinished 6 1/2-ton scultpure, standing in a specially made studio at the Maryland Institute College of Art just north of downtown Baltimore, depicts the warrior-like Fudo Myoh-oh ("Immovable King of Light") form of Buddha, rather than the plump and benevolent figure more familiar to Americans.

This Buddha's eyebrows arch angrily and its mouth is contorted in an angry grimace. But its ferocity is benign, according to Buddhist tradition, and serves to keep evil away.

Largely bankrolled by Japanese agribusinessman Koji Oshiba and several American companies, the project could cost as much as $400,000. It was started last June as a gesture toward improving cultural understanding. It will be completed in August 1991, according to art institute representatives.

"It still needs to be painted and gilded and made more intricate," institute spokeswoman Kim Chappell said. Also, the arms, bearing a sword and a rope, must be attached.

The rope symbolizes the "bondage of ego," said institute spokeswoman Debra Rubino, and the sword the "cutting away of the ego."

The statue, made of slabs of Alaskan yellow cedar glued together in vertical sheets, has been fashioned by a team of three Japanese sculptors commissioned by Oshiba. The pieces were cut and assembled in the studio, with the statue taking shape in a prone position. Once everything but the arms was assembled, the statue was raised last week to a standing position by a hoist in the ceiling of the 50-foot-high studio.

After it is completed next summer, the statue will be donated to an organization, probably in Maryland, Chappell said. Two Buddhist temples in Montgomery County have expressed interest, she said, but selection will not be limited to Buddhist organizations.

How did Baltimore become the site for construction of the statue? Maryland Institute President Fred Lazarus said the sculptors, unfamiliar with the United States, asked the Asian Cultural Council in New York for help. Council President Richard Lanier called his friend Lazarus at the institute in Baltimore and a deal was struck.