Toshiba shares dropped 8.75 percent to end at 209.7 yen in Tokyo after Reuters reported the company would book a $6.3 billion hit to its U.S. nuclear unit and may sell more of its prized flash-memory chip business to urgently raise funds. Reuters added, citing a source, that the Japanese company's loans from banks and insurers stood at $7 billion.
Nomura said in a note dated Feb. 14, it was changing its rating on Toshiba from Buy to Suspended. Analyst Masaya Yamasaki said in the note that Nomura's view on Toshiba had centered on the potential for the memory business.
"The company announced for the first time today that it is considering selling a majority stake in the memory business along with other options for injecting capital from outside sources, making it difficult to price in the memory business' potential," said Yamasaki.
Meanwhile, the Wall Street Journal reported that Toshiba chairman Shigenori Shiga would resign from his post effective Wednesday, while the former chief executive of Toshiba's U.S. nuclear-plant business Westinghouse Electric, Danny Roderick, was stripped of his executive post, the Journal said.
In other Japanese corporate activity, internet and telecom giant SoftBank announced a $3.3 billion cash acquisition of asset manager Fortress Investment Group. SoftBank shares climbed 1.58 percent to 8,670 yen.
The climbed 199 points, or 1.03 percent, to finish at 19,437.98, while the Topix added 14.57 points, or 0.95 percent, to 1,553.69. Across the Korean Strait, the Kospi finished up 9.29 points, or 0.45 percent, at 2,083.86.
In Hong Kong, the added 1.29 percent in late-afternoon trade, while Chinese mainland shares slipped slightly by market close. The composite fell 5.20 points, or 0.16 percent, to 3,212.71, while the Shenzhen composite shed 17.28 points, or 0.88 percent, to 1,947.04.
Australia's benchmark ASX 200 climbed 53.83 points, or 0.94 percent, to 5,809.07, as most sectors finished higher. The heavily-weighted financial sector was up 1.70 percent, with major banks gaining more than 1 percent each.
Major miner BHP Billiton gained 1.26 percent.
Reuters reported that striking workers at Chile's massive Escondida copper mine and BHP, which operates the mine, have agreed to renew talks on Wednesday. The mine produced over 1 million tonnes of copper, about 5 percent of the world's total in 2016, according to Reuters. Copper prices rose 0.58 percent to $6,056 a tonne on Wednesday morning, after falling to $6,021 in the previous session.
Fed Chair Yellen said in prepared remarks to Congress that waiting too long to raise interest rates would be "unwise," given the rise in inflation and economic growth.
Rodrigo Catril, a currency strategist at National Australia Bank, said in a note the remarks "triggered a sell-off in U.S. Treasury yields and a broad dollar rally as she left the door open for a rate hike as soon as the next Federal Open Market Committee meeting in March."
The climbed against a basket of currencies to trade at 101.29 at 3:36 p.m. HK/SIN on Wednesday, from levels below 100.8 in the previous session.
Among major currency pairs, the yen weakened slightly against the dollar to trade at 114.53, down from an earlier high of 114.19. The euro fetched $1.0570, while the Australian dollar traded at $0.7665.
Some analysts believe the dollar could extend gains as Yellen continues her testimony before Congress on Wednesday.
On Wall Street on Tuesday, the rose 92.25 points, or 0.45 percent, to end at 20,504.41. The S&P 500 index gained 9.33 points, or 0.40 percent, to close at 2,337.58, while the advanced 18.62 points, or 0.32 percent, to end at 5,782.57.