Most Asian markets retreated Wednesday as traders moved their chips amid concerns the U.S. Federal Reserve may hike interest rates soon, with Japan's shares ending a tad down after topsy-turvy trade.
The Federal Open Market Committee is scheduled to release its April meeting minutes at 2 p.m. ET Wednesday and many analysts are concerned the minutes could be more hawkish than the statement that followed April's meeting.
That concern got some juice from comments by San Francisco Fed President John Williams and Atlanta Fed President Dennis Lockhart, who said the Fed could still raise rates two or three times this year, according to a Reuters report.
The benchmark Nikkei 225 index spent the session like a cat at a door, unwilling to decide if she wanted to stay in or out, before ending up flopped in the doorway, with the indicator ending down just 0.05 percent, or 8.11 points, at 16,644.69, after oscillating between positive and negative.
Traders were likely weighing whether the good news from better-than expected economic growth data, released shortly before market open, was good or bad news for markets.
Japan's gross domestic product (GDP) for the January-to-March period grew faster than expected, with real GDP rising 0.4 percent on quarter compared with a Reuters poll forecast for 0.1 percent growth. Annualized GDP for the period grew 1.7 percent, compared with expectations from a Reuters poll for 0.2 percent growth.
The market had expected that a poor reading would spur additional easing measures from the Bank of Japan (BOJ) - in other words, that bad news would have been good news for traders.
Shares turned higher as traders appeared to focus on the benefits to the market if the Fed hikes rates, a move which would strengthen the U.S. dollar and weaken the yen, but those gains proved short-lived.
The yen also wavered in reaction to the data. A weaker yen is generally considered a positive for the country's equities, particularly exporters, which will see their profits flattered when overseas earnings are repatriated. The Japanese currency climbed as high as 108.70 against the U.S. dollar and as weak as 109.51 in late afternoon trade, compared with around 109.09 before the data. At 3:02 p.m. SIN/HK time, the U.S. dollar was fetching 109.45 yen.
Other markets in the region were mostly lower.
Down Under, the S&P/ASX 200 ended down 0.74 percent, or 39.67 points, at 5356.20, dragged by a 0.83 percent decline in the heavily weighted financials sub-index. That was offset by continued gains in the energy sector, which added 0.24 percent.
Hong Kong's Hang Seng Index shed 1.54 percent by 3:03 p.m. SIN/HK time. On the mainland, the Shanghai Composite ended down 1.28 percent, or 36.53 points, at 2807.15, and the Shenzhen Composite finished off 2.68 percent, or 48.60 points, at 1766.08. South Korea's Kospi index shed 0.58 percent, or 11.33 points, to end at 1956.73.