Asian Stocks Climb Higher in Choppy Trade

Asian stocks rose on Wednesday but ended off session highs as a weak Australian dollar, volatile Japanese markets and renewed fears of the U.S. Federal Reserve tapering its bond-buying program scaled back momentum.

The Nikkei pared gains after rallying as much as 1 percent in a choppy session, South Korea's Kospi hit an eight-week high at the key 2,000 level and Australian equities were flat.

The Shanghai Composite also pared gains after hitting a fresh two-month high earlier in the session. So far, the index has notched up gains of 1.5 percent for this week to be Asia's best-performing index.

(Read More: The 'Great Rotation' — Is It Finally Happening?)

Sentiment in Asia was lifted after upbeat U.S. data helped propel the Dow to record heights. Single-family home prices rose in March to their best annual gain in seven years, according to the S&P/Case Shiller composite index.

All eyes were on Bank of Japan (BOJ) governor Haruhiko Kuroda as he delivered a speech in Tokyo on Wednesday. Kuroda called for global flexibility in dealing with the lingering financial crisis, underlining both the challenge and the need for "Abenomics," which combines both fiscal and monetary stimulus measures.

Nikkei Ends Flat

Investors remain unnerved by the benchmark index's 11 percent fall since last Thursday and their wariness resulted in a round of profit taking on electronic equipment makers. Industrial machinery manufacturer NSK led losses by 3 percent.

(Read More: Forget the Volatility, Nikkei May Test 17,000: Chart )

Retailers were in focus after data revealed that retail sales for the month of April fell for a fourth straight month. Fast Retailing tanked 2 percent on the news.

Mobile operator Softbank closed up 2 percent after reaching an agreement with U.S officials over details of their pending purchase of Sprint Nextel.

Australia Little Changed

The Australian dollar extended losses against the greenback to hit $0.9553, it's lowest level since October 2011. This added greater pressure on banking stocks as international investors shed their Australian holdings due to the currency risk.

All of Australia's 'Big 4' lenders were lower with Westpac and Commonwealth Bank of Australia down 2.5 percent each.

(Read More: Aussie Dollar Is Now the World's 'Weakest Currency')

Slot machine supplier Aristocrat Leisure rose 6 percent after raising its dividend following an 11 percent rise in half-year profits.

Shanghai Higher

The benchmark index hit its highest levels since March the 2,330 mark thanks to support in real estate developers.

Deluxe Family led gains by 10 percent while Poly Real Estate added 1 percent on news that the government is attempting to rein in land prices, which will make it easier for developers to acquire land.

The index has been on a winning streak for the month of May, trading 6 percent above its 200-day simple moving average.

Kospi Crosses 2,000

Tech stocks lifted the benchmark index to its highest level since April 2 with flat screen maker LG Display leading gains by 4 percent and Samsung Electronics up by 2 percent.

Power companies were weighed down by news that South Korean nuclear safety authorities have halted operations of several nuclear reactors after discovering substandard parts in them.

Korea Electric Power Corporation (KEPCO) slumped 5 percent.

— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC