Asian shares flip-flopped on Wednesday with markets cautious ahead of what is expected to be the Federal Reserve's first rate hike in a year, with comments on the outlook key.
The market has priced in a 95.4 percent probability of a higher Fed rate, based on CME Group's 30-Day Fed Fund futures.
With a Fed decision to raise rates priced in, one investor said that the market is more concerned about forward guidance from the U.S. central bank, known as the "dot-plot."
"The bigger question is Fed expectations and if there are any changes to the dot plots," Joshua Crabb, head of Asian equities at Old Mutual Global Investors, said to CNBC.
"Investors are looking for two hikes next year at the moment but if that starts to change, then it could impact asset allocation around the world," Crabb added.
Japanese share benchmark, the , closed near flat, up 0.02 percent or 3.09 points at 19,253.61.
A bill to legalize casinos in Japan cleared an important parliamentary panel on Truesday, and is expected to be approved by the full chamber of the upper house on Wednesday. The casino legalization bill had already passed the lower house on Dec. 6.
The Bank of Japan's Tankan survey showed that an uptick in the sentiment of Japan's major manufacturers, with the headline index at plus 10 in the fourth-quarter, but expected to fall to plus 8 over the next three months.
Australia's ASX 200 finished up 0.71 percent or 39.55 points at 5,584.6, buoyed by gains across all sub-indexes except for materials, which was down 0.19 percent and energy, which was down 0.07 percent.
Shares of betting and lottery business Tatts rose 8.45 percent to A$4.49 each, after rising up 12 percent earlier. Macquarie Group and KKR offered to buy Tatts for A$7.3 billion ($5.5 billion) in a counterbid after Tabcorp agreed to buy Tatts in a deal valued at A$6.4 billion ($4.9 billion) in October. Tabcorp stock fell 0.86 percent to A$4.61.
The closed 0.45 percent or 14.24 points at 3,140.8, as the Shenzhen composite lost 0.811 percent or 16 points at 1,959.86. Chinese markets have been under recent pressure due to new stock investment regulations on Chinese insurers and negative sentiment arising from Trump's comments on the "One China" policy.
In South Korea, the Kospi ended up 0.04 percent or 0.89 points at 2,036.87 after but wavering between gains and losses, while Hong Kong's Hang Seng added 0.28 percent by mid-afternoon..
Oil prices fell more than 1 percent in Asian trade, after American Petroleum Institute data showed surprise increases in U.S. crude inventories. The U.S. crude stumbled 1.34 percent to $52.27 a barrel as global benchmark Brent was off 1.22 percent to $55.04.
The three major U.S. indexes closed at all-time highs. The rose 0.58 percent to 19,911.21, the S&P 500 index added 0.65 percent to end at 2,271.72, while the composite finished up 0.95 percent to 5,463.83.
"The market does not view the Fed as the 'Grinch that stole Christmas' but rather is seeing the rate hike as a sign of a healthy U.S. economy," said Stephen Innes, senior trader at OANDA, in a note on Wednesday.
Currency markets saw little change ahead of the Federal Open Market Committee (FOMC) announcement later on Wednesday, with the dollar softer against a basket of currencies, trading at 100.92 by early afternoon. The yen traded at 115.13 against the greenback as of 3:00 pm HK/SIN, while the Australian dollar was at $0.749.
, generally seen as a safe haven asset, was up 0.35 percent at $1,162.36 an ounce.