Asian stocks were mixed on Wednesday after a preliminary gauge of Chinese factory activity for April showed a slight improvement from March.
HSBC's flash purchasing manager's index (PMI) for China came in at 48.3 in April, higher than the bank's final March reading of 48, but still in contraction territory for a fourth straight month.
"It is slightly better than what I called for but I wouldn't read too much into it. Leading indicators nowadays are giving conflicting signals but I think the property sector is slowing down very fast and that's the reason why we're very worried about the second-quarter GDP. We think it's going to slow down," said Zhang Zhiwei, chief China economist at Nomura.
A strong lead from Wall Street overnight helped to lift sentiment in Asia. U.S. stocks rose on Tuesday, with the extending its longest winning run of the year, on the back of earnings reports and high-profile deals in the healthcare sector.
Nikkei up 1%
Japanese stocks ended at a fresh two-week high, erasing the previous day's 0.8 percent loss, thanks to more than 1 percent gains in index heavyweights Softbank and Fast Retailing.
Dollar-yen fell after hitting a session high of 102.69 in early trade, but industrial manufacturers still posted gains. Mitsubishi Motors rose 3 percent while Sony added over 1 percent.
Panasonic jumped nearly 2 percent after Tesla CEO Elon Musk said the Japanese firm will likely be his company's partner in a planned $5 billion U.S. battery factory.
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Shares of railroad and hotel operator Seibu Holdings ended 11 percent higher from its initial public offering price of 1,600 yen.
Shanghai slips 0.3%
Mainland shares hovered near Tuesday's two-week low after HSBC's purchasing manager's index showed a decline in new orders. Fears of tight market liquidity dampened the mood after the country's regulator posted draft IPO prospectuses of19 firms on its website on Tuesday night.
Banks were in focus after the People's Bank of China said that it will reduce the reserve requirement ratio for rural commercial banks by 2 percentage points starting Friday, in a bid to boost growth in those regions. Bank of China eased 0.8 percent and Hua Xia Bank fell over 1 percent.
Meanwhile, the yuan fell to a fresh 14-month low against the greenback at 6.2439.
ASX up 0.7%
Australia's benchmark index rose to its highest levels since June 2008 while the tumbled to a 2-week low of $0.9274 following weaker-than-expected inflation data.
The consumer price index (CPI) rose an annual 2.9 percent in the first quarter, lower than the 3.2 percent a Reuters poll had forecast, but within the Reserve Bank of Australia's (RBA) 2-3 percent target rate.
"The Australian dollar was taken to the woodshed and chopped up [during Asian trade.] One suspects the Australian treasurer Joe Hockey will be fairly pleased given his rhetoric of late; while the RBA will be content that a major catalyst for earlier rate hikes has been put on the backburner for now," said Chris Weston, market strategist at IG in a note.
Banks led the gains with Westpac and Commonwealth Bank of Australia up 1 percent each while Macquarie Group jumped 1.5 percent.
Australand Property Group fell over 1 percent after rejecting an all-share takeover bid from Stockland.
Kospi slips 0.2%
South Korea's benchmark Kospi erased early gains despite a 1 percent rally in index heavyweight Samsung Electronics.
India up 0.5%
Indian shares extended gains while the rupee weakened past the 61 per dollar mark to a one-month low.