Asian stocks turned in a mixed performance on Wednesday, as oil prices slipped on a stronger dollar and Fed Vice Chair Stanley Fischer's upbeat assessment of the U.S. economy made it clear that a rate hike would be possible at the Fed's next policy meeting in September.
While a drop in the yen following stronger-than-expected U.S. consumer confidence data for August helped Japanese shares post strong gains, Australian shares led regional losses amid a sell-off in resource stocks.
Markets have their attention firmly focused on the all-important U.S. jobs data due Friday after a run of strong economic data and hawkish comments from several Federal Reserve officials.
China's Shanghai Composite index rose 10.81 points or 0.35 percent to 3,085.49, led by gains in property stocks after Nexus Capital raised its stake in Vanke's Hong Kong-listed shares. Hong Kong's Hang Seng index was down 0.2 percent at 22,976.
Japanese shares hit over two-week high as the yen weakened and disappointing industrial output data underscored the need for more stimulus. Industrial production was flat in July, defying forecasts for an increase, while a measure of housing starts rose more than expected in the last quarter, separate reports showed.
The Nikkei average climbed 162.04 points or 0.97 percent to 16,887.40, the highest level since August 12, while the broader Topix index closed 1.27 percent higher at 1,329.54. Canon, Panasonic, Toshiba and Mazda Motor jumped 2-5 percent as the dollar-yen pair hit a one-month high on expectations the Fed could soon lift interest rates.
Mitsubishi UFJ Financial advanced 4.2 percent on a Nikkei report that Google will partner with the country's largest bank to launch the U.S. tech giant's digital wallet platform in Japan.
Australian shares closed firmly in the red as a stronger dollar weighed on commodity-related stocks and central bank data showed domestic credit growth continued to slow in July. The benchmark S&P/ASX 200 dropped 45.30 points or 0.83 percent to 5,433 and the broader All Ordinaries index closed down 44.10 points or 0.79 percent at 5,529.40.
Miners BHP Billiton and Fortescue Metals fell over 3 percent each and Rio Tinto dropped 2.7 percent even as iron ore prices snapped a four-session losing streak. Atlas Iron soared 10 percent after narrowing its annual loss.
Gold miners Newcrest Mining, Evolution Mining, Northern Star Resources and Regis Resources lost 2-5 percent after gold prices hit two-month lows overnight on U.S. rate hike worries.
Oil & gas producer Santos dropped 1.3 percent and Oil Search fell 2.9 percent as benchmark U.S. crude futures hovered near a three-week low on API data indicating a build in U.S. crude inventories. Banks ended mixed, with Commonwealth losing 1.5 percent and Westpac declining 0.6 percent while ANZ rose 1.4 percent and NAB added 0.4 percent.
Building materials supplier Adelaide Brighton tumbled 4.2 percent and live cattle exporter Wellard slumped 13.6 percent on disappointing financial results.
Seoul shares drifted lower amid uncertainty surrounding U.S. interest rates. The benchmark Kospi dropped 5.09 points or 0.25 percent to 2,034.65. Trading in Hanjin Shipping shares was suspended as the troubled shipper decided to file for court protection after losing the support of its banks.
Its local rival Hyundai Merchant Marine soared 25.6 percent and Korean Air Lines, Hanjin Shipping's largest shareholder, closed 1.5 percent higher.
New Zealand shares eked out modest gains, with the benchmark S&P/NZX 50 index rising 10.88 points or 0.15 percent to 7,398.83. While The Warehouse Group paced gainers to end 2.5 percent higher at $2.89, Orion Health Group and Chorus fell over 3 percent each.
Retirement village operators and developers posted broad-based gains, with Metlifecare, Summerset Group Holdings and Ryman Healthcare climbing 1-2 percent.
The Malaysian markets were closed for the National Day holiday. India's Sensex was up 0.4 percent, extending gains for the third straight session.
Indonesia's Jakarta Composite was rising 0.6 percent while Singapore's Straits Times index was down 0.2 percent and the Taiwan Weighted dropped half a percent.
U.S. stocks fell modestly in thin trading overnight, as oil prices hit two-week lows on dollar strength and economic data on consumer confidence and home prices proved a mixed bag. The Dow industrials dropped 0.3 percent while the S&P 500 and the tech-heavy Nasdaq shed about 0.2 percent each.
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