Asia Markets

Asian shares mixed; Shanghai rallies on reform, Nikkei underperforms

Asian equity markets were mixed on Wednesday with Japan leading losses on the back of a slightly stronger currency while Chinese shares rallied on news of financial reforms.

Caution ahead of Friday's closely-anticipated nonfarm payrolls report also weighed on sentiment. Reuters economists are eyeing an increase of 180,000 jobs for November, down from October's 204,000 figure.

Thursday's European Central Bank (ECB) meeting is in focus, with analysts awaiting the central bank's economic forecasts. If the ECB indicates inflation will remain below its target into 2015, it may mean new liquidity measures next year.

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Nikkei skids 2.2%

Why this strategist is underweight Japan

Japan's Nikkei index finished at its lowest level in two weeks, just one day after closing at a six-year high, after the yen recovered from the previous day's six-month trough against the greenback.

Investors used the opportunity to book profits on large-cap stocks that enjoyed a stellar rally last week. Panasonic and Sony eased 3 percent each while robotics maker Fanuc and Nintendo tumbled 2 percent each.

Financials took a hit with Mitsubishi UFJ down 2 percent while Daiwa Securities and Nomura fell nearly 3 percent each.

(Read more: HSBC strategist: Am I the last person underweight Japan?)

Shanghai jumps 1.6%

The Shanghai Composite rose to its highest levels since mid-September on news that financial liberalization reforms in the Shanghai free trade zone (FTZ) will be implemented within three months. The People's Bank of China (PBOC) Shanghai chief, Zhang Xin, said the policies will serve as models for other free-trade zones in Chinese regions.

Stocks involved in the Shanghai FTZ soared with Shanghai Material Trading, Shanghai International Port and CTS International Logistics rising by the daily limit of 10 percent.

(Read more: We're reassured by China reforms: World Bank)

World Bank lowers forecasts for East Asia

Property stocks also rallied with Shanghai Shimao leading gains by 3.6 percent on hopes for land reforms outlined in the Third Plenum.

Kospi 1% lower

South Korean shares tracked global weakness to hit a near three-week low. Data showing the nation's foreign reserves rose to a record high for a fifth consecutive month in November was unable to boost sentiment.

Hyundai Motor extended the previous day's sharp losses by 2.5 percent while index heavyweights Samsung Electronics and LG Electronics eased 1.5 percent each.

Sydney up 0.3%

Australia's benchmark reversed gains to move off a seven-week low despite third-quarter real gross-domestic-product (GDP) missing estimates. The disappointing data saw the Australian dollar hit a new three-month low against the greenback.

Shopping mall operator Westfield Group surged over 4 percent after announcing that it plans to combine its Australian and New Zealand business with Westfield Retail Trust.

Electronics retailer Dick Smith rose 3.6 percent at its debut after raising $315 million in its initial public offering.

In India, stocks fell 0.6 percent to around 20,729 points.

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