Asia markets mixed; Brent hits $50 for the first time in nearly 7 months

Across Asian markets, the energy sector saw gains as oil prices hit the $50-a-barrel mark for the first time since early November, but broader markets were mixed.

In Japan, the Nikkei 225 gave up most of its gains to close the session nearly flat, up just 0.09 percent at 16,772.46, while across the Korean Strait, the Kospi erased gains to finish down 3.45 points, or 0.18 percent, at 1,957.06. In Hong Kong, the Hang Seng index ended up 0.14 percent, or 29.06 points, at 20,397.11.

Down Under, the S&P/ASX 200 finished up 15.59 points, or 0.29 percent, at 5,388.10, with the energy sub-index advancing 1.96 percent.

Mainland Chinese markets turned positive in the final hour of trade, with the Shanghai composite retracing nearly 1 percent losses to close up 0.27 percent, or 7.49 points, at 2822.57, while the Shenzhen composite added 0.48 percent, or 8.70 points, to end at 1808.93.

Global benchmark Brent futures traded up 0.60 percent at $50.04 a barrel as of 3:40 p.m. HK/SIN, while U.S. crude futures were higher by 0.54 percent at $49.83.

Oil prices gained as much as 2 percent in the U.S. session, after government data showed a larger-than-expected drop in crude inventories. Reuters reported the U.S. Energy Information Administration said crude inventories fell 4.2 million barrels in the week to May 20. Analysts polled by Reuters expected a drop of 2.5 million barrels in inventory.

Energy plays in Asia closed mostly higher, with Santos shares advancing 4.91 percent, Woodside Petroleum adding 2.06 percent and Inpex gaining 2.55 percent. Chinese mainland oil stocks were mostly higher, with Sinopec adding 1.06 percent.

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In the currency market, the Japanese yen saw renewed strength against the dollar, with the pair trading at 109.90 as of 3:42 p.m. HK/SIN.

But the pair could climb ahead. Short-covering in the pair was one of the greatest risks that the dollar/yen pair faced at the moment, according to Kathy Lien, managing director of foreign exchange strategy at BK Asset Management.

"Even after the recent rally, speculative long yen positions are near record highs," she said in a note late Wednesday.

Japanese exporters closed mixed on the back of fresh yen strength. Toyota shares were up 0.74 percent and Nissan shares advanced 0.66 percent, but Sony shares pared losses of nearly 1 percent to close flat, after climbing 6.46 percent in Wednesday's session as the market reacted positively to its earnings forecasts.

Usually a stronger yen is a negative for exporters as it reduces their overseas profits when converted to local currency.

The Reuters Tankan, a monthly poll which aims to track the Bank of Japan's quarterly tankan survey, found that Japanese manufacturers' confidence fell to a three-year low in May, highlighting the impact of a strong yen on exporters of cars and electronics. The survey also found the service sector's mood fell in May, reported Reuters.

Meanwhile, the dollar lost ground against a basket of currencies, with the dollar index at 95.252 as of 3:43 p.m. HK/SIN, after touching levels as high as 95.661 in Wednesday's trade, but that's up from levels under 93 at the beginning of the month.

Angus Nicholson, a market analyst at spreadbetter IG, said the pause in the dollar strength was temporary as economic data stateside continued to be positive.

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The New Zealand dollar retreated against the greenback, trading at $0.6706 at 3:44 p.m. HK/SIN, down from levels as high as $0.6771 Wednesday. But that was off the session low of $0.6695, getting a boost after New Zealand's finance minister, Bill English, released the 2016 May Budget, which included a sizable social investment package to support New Zealanders to get off benefits and into work.

Foreign exchange strategists at the Commonwealth Bank of Australia said in a morning note that the Kiwi came under pressure overnight after "Fonterra's milk price forecast for the 2016-17 season was much lower than expected."

Fonterra shares closed flat.

The Chinese yuan traded at 6.5583 against the dollar in the afternoon. Before market open, the People's Bank of China (PBOC) set the yuan mid-point at 6.5552, suggesting a stronger Chinese currency, after fixing it at a five-year low against the greenback on Wednesday at 6.5693.

China's central bank lets the yuan spot rate rise or fall a maximum of 2 percent against the dollar, relative to the official fixing rate.

Citi's head of Asia-Pacific trading strategies, Mohammed Apabhai, told CNBC's "Squawk Box" it was clear "regardless of whatever is actually going on, [the PBOC is] moving in line with the dollar."

"There's been this stealth devaluation against the yen and the euro, and that has happened pretty much over the last few months," he said.

In company news, Seven & i opted to offer its departing chairman and CEO, Toshifumi Suzuki, the post of honorary adviser, according to the Japanese business daily Nikkei.

But the Nikkei reported that in the interest of keeping Suzuki at a distance from the management of the company, the role would likely be set up away from the headquarters. The move comes after Suzuki failed to oust Ryuichi Isaka, who had been elected to replace Suzuki, Reuters reported.

Seven & i shares closed up 1.14 percent.

Elsewhere, Takata shares soared 21.16 percent, after reports citing the Nikkei said U.S. fund KKR was looking to invest in the troubled airbag maker. The company had been embroiled in a global scandal involving faulty airbags that led to large number of recalls.

KKR said they would not comment on market speculation when contacted by CNBC.

Meanwhile, the two-day G7 Summit 2016 Japan kicked off in Ise-Shima on Thursday.

Major indexes in the U.S. closed higher, with the Dow Jones industrial average up 0.82 percent, the S&P 500 higher by 0.7 percent and the Nasdaq composite adding 0.7 percent.