Asian markets struggled to gain ground Wednesday as economic data showed the process of turnaround to recovery was likely to be a slow grind, and the greenback capitalized on that more cautious sentiment.
Hong Kong and Thai markets are closed for holidays and will reopen on Thursday.
In Japan, business confidence pulled back from a record low hit three months ago, but the improvement was smaller than market players had expected and still a negative reading. That followed an unexpectedly steep slide in U.S. consumer confidence in June, which dented optimism on Wall Street about prospects for recovery and weighed on shares in Asia.
The dollar index gained 0.2 percent as the U.S. dollar took back lost ground from sterling and the yen. The yen fell broadly as Japanese pension and mutual funds picked up overseas assets at the start of the new quarter, traders said, showing that investors are, however, still keen to put their money back to work. Oil held above $70 a barrel after industry inventory data showed a bigger-than-expected fall in crude stocks, which helped pare some of the previous day's losses after data unsettled investors about a potential U.S. economic rebound.
Japan's Nikkei 225 Average dipped 0.2 percent, with shares in Orix Corp and All Nippon Airways sliding after sources familiar with the companies said they were set to announce large public share offerings.
South Korea's KOSPI closed 1.5 percent higher, helped by positive South Korean export and Chinese manufacturing data, with rallies in banks and techs including KB Financial Group and lifting the index higher.
Australian shares finished down 2 percent as soft economic indicators around the world put pressure on growth-sensitive stocks such as shopping mall owner Westfield Group. Rio Tinto, recovered from heavier early losses to be down 1.1 percent, while bigger rival BHP Billiton, the world's top miner, also recovered to be down 2.3 percent. China's softening of its stance on iron ore negotiationshelped the miners. Rio was also helped after a source told Reuters that Chinalco was likely to participate in the $15.2 billion rights offer.
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Singapore's Straits Times Index was 0.8 percent higher. Singapore Airlines closed flat after strong gains in the previous session. Bank heavyweights also weighed on index, but UOB closed flat.
China's Shanghai Composite Index extended gains, up 1.7 percent, led by rotational buying in banks and property developers. The SCI also breached the psychologically-important 3,000 mark.