Stocks in Asia Pacific were mixed on Wednesday as investors weighed the potential impact of rising tensions between Washington and Beijing against economies reopening, as coronavirus containment measures are eased.
Mainland Chinese stocks were lower on the day, with the Shanghai composite slipping 0.34% to about 2,836.80 while the Shenzhen composite declined 0.855% to around 1,774.22. Hong Kong's Hang Seng index dipped 0.71%, as of its final hour of trading.
Elsewhere, the Nikkei 225 in Japan rose 0.7% to close at 21,419.23 as shares of robot maker Fanuc surged 2.81%, with the Topix index also adding 0.96% to end its trading day at 1,549.47. Over in South Korea, the Kospi closed fractionally higher at 2,031.20.
Australia's S&P/ASX 200 finished its trading day slightly lower at 5,775.
Overall, the MSCI Asia-ex Japan index shed 0.28%.
Developments in U.S.-China relations were likely watched by investors on Wednesday. A Bloomberg News report said the U.S. was considering sanctions on Chinese firms and officials over the situation in Hong Kong. U.S. President Donald Trump said Tuesday afternoon he would make an announcement about the administration's response to China's actions by the end of this week.
"Mounting US-China tensions bodes ominous for the global economy amid pandemic fragilities," Vishnu Varathan, head of economics and strategy at Mizuho Bank, wrote in a note.
Aberdeen Standard Investments' James Thom told CNBC's "Street Signs" on Wednesday that he was "not surprised" to see markets being "a little bit more cautious."
"There are multiple headwinds gathering now ... on multiple fronts and we've been cautious ... for some time now," said Thom, who is senior investment director of Asian equities at the firm. "It feels almost as if the only thing that is propping up markets is the stimulus packages that we've seen across the region … and the globe … and this speculation that the lockdown easing … is going to be a success but I think the jury is still out on that front."
The U.S. dollar index, which tracks the greenback against a basket of its peers, last traded at 99.114 after slipping from levels above 99.2 earlier.
— CNBC's Maggie Fitzgerald contributed to this report.