Asian stocks mixed on dovish Yellen, China flash PMI

Asian equities were mixed amid choppy trade on Wednesday as a surprise upside in China's manufacturing sector failed to lift markets across Asia.

The flash HSBC Purchasing Managers' Index (PMI) rose to 50.1 from January's 49.7 final reading, above the 50-mark which demarcates expansion from contraction, a private survey showed on Wednesday. But traders shrugged off the positive surprise.

"Overall growth remains subdued in China's manufacturing sector. A caveat for this month could be the seasonal effect as there are fewer working days in February," John Zhu, greater China economist at HSBC, told CNBC Asia's "Squawk Box."

Read MoreAfter Yellen, investor eyes shift to housing

Overnight, U.S. stocks advanced in choppy trade, with the Dow Jones Industrial Average and S&P 500 hitting intra-day records, as Federal Reserve Chair Janet Yellen said the central bank would not hike rates for the next few FOMC meetings.

"None of her views were new, but the market took the testimony as slightly move dovish than before and moved the expectations of a first move in the Fed funds rate from September to October," Evan Lucas, IG's market strategist, wrote in a note.

Meanwhile, news that finance ministers from the euro zone approved Greece's new bailout plan supported sentiment. Athens submitted a list of reform proposals at around midnight on Monday, in return for a four-month extension on its bailout package.

Symbol
Name
Price
 
Change
%Change
NIKKEI
---
HSI
---
ASX 200
---
SHANGHAI
---
KOSPI
---
CNBC 100
---

Mainland indices mixed

China's stock market widened losses to close down 0.5 percent on its first day of trade since being shut for the week-long Lunar New Year holiday. The Shanghai Composite index wavered between gains and losses following the flash PMI reading.

Among the top losers were insurance stocks; China Life Insurance and China Pacific Insurance retreated more than 4 percent each, while Ping An Insurance fell 3.3 percent.

In Hong Kong, the Hang Seng index ticked up 0.1 percent following news that the city grew 2.2 percent in the fourth quarter of 2014 from a year earlier. The gross domestic product was a whisker higher than Reuters consensus for growth of 2.1 percent, but fell short of the 2.7 percent percent in the third quarter.

Gaming stocks limited gains on the bourse as the Macau government plans to impose a limit to the number of mainland tourists that visit the city. Sands China, Melco Crown and Galaxy Entertainment plunged more than 6 percent each.

Nikkei slips 0.1%

Japan's Nikkei 225 index ended a relatively choppy session lower, but still in sight of Tuesday's 15-year highs, as the U.S. dollar continued to lose ground against the yen following Yellen's dovish congressional testimony.

Hitachi, which was in focus for snapping up the rail business of Italian aerospace and defense group Finmeccanica for $2.2 billion, fell 0.8 percent. Among other losers, Japan Airlines receded 2.3 percent, while index heavyweights such as Fast Retailing and Fanuc notched down 0.9 and 0.2 percent each.

Banks outperformed the bourse after the Nikkei business daily reported that Japan's Financial Services Agency is moving to give bank groups the freedom to expand into areas like e-commerce. Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group gained 1.4 and 0.1 percent each.

Read MoreIs the Nikkei in for a pullback?

ASX adds 0.3%

Australia's S&P ASX 200 index finished just shy of a seven-year intra-day high, as a mixed finish among the big four lenders capped advances.

National Australia Bank ended 0.5 percent higher, while Australia and New Zealand Banking settled just above the flatline. Commonwealth Bank of Australia and Westpac dipped 0.2 percent each.

Corporate earnings remain the key theme in the Australian markets; WorleyParsons tanked 12.2 percent following a 7 percent drop in first-half net profit, while Pact Group lost nearly 10 percent despite reiterating its full-year guidance for higher revenue and underlying earnings in 2015. Global shopping center operator Westfield Corporation was little moved after delivering a 20 percent increase in half-year profit.

In contrast, Perth-based mining services Macmahon Holdings rocketed 32.4 percent after it declared confidence that it will emerge from the mining slump that has led to a 30 percent loss in first-half profit.

Meanwhile, the Australian dollar extended gains to hit a near four-week high of $0.7885 to the dollar on the back of better-than-expected manufacturing data from the mainland.

Read MoreIs the RBA wrong about the Aussie dollar?

Kospi up 0.7%

South Korea's Kospi index was one of the top performers in the region, hitting a near three-month high as index heavyweights rallied. Utility Kepco led gains by piling on 2.3 percent, while Posco and KB Financial Group climbed 1.8 and 1.2 percent each. Meanwhile, Samsung Electronics and Hyundai Motor, the top two heaviest weighted stocks on the bourse, advanced 0.9 percent, respectively.

Kumho Tire lost 0.7 percent as news of strikes at its plants damped sentiment.

Meanwhile, markets in New Zealand closed up 2 percent to a record high of 5,842 points.