Australia, Korea Gain; Firm Yen Hurts Nikkei

Asian shares outside of Japan closed in the green on Wednesday, led by Australian banks and South Korean exporters while the Nikkei lost ground on a firmer yen amid conflicting interpretations of G7 comments about the currency's recent weakness.

Investors will likely stay cautious ahead of the outcome of a Bank of Japan meeting that ends on Thursday, although many expect it hold off on any fresh easing measures until a new governor is appointed.

Financial markets in China and Hong Kong remain closed for the Lunar New Year holidays.

ASX 200
CNBC 100

The FTSE CNBC Asia 100 index ended up 0.8 percent.

Japan's Nikkei share average dropped as a pause in the yen's decline triggered profit-taking on exporters, while Gree tumbled after cutting its annual profit forecast.

The benchmark index closed down 1 percent at 11,251.4, while the broader Topix shed 1.2 percent to 957 points.

Social game site operator Gree tumbled 15.2 percent after it's group net profit in the July to December period fell 18.3 percent from a year earlier.

Big exporter Toyota Motor, the day's third most-traded stock, shed 1.8 percent while Sony, the fourth most-heavily traded, lost 5.6 percent.

Mitsubishi Materials dropped 6.6 percent, the lowest in nearly two months, after the company cut its operating profit forecast for the year ending March 31.

South Korean shares saw their biggest daily gains since January 2, outperforming Asian peers as a firmer yen lifted South Korean exporters. Investors will be awaiting upcoming events such as the Bank of Korea rate decision.

The Korea Composite Stock Price Index (KOSPI) rose 1.6 percent to close at 1,976 points.

Index heavyweight Samsung Electronics rose 1.3 percent, extending a two-day winning streak after dipping into negative territory earlier in the session.

Australian shares climbed 0.9 percent, breaking past the 5,000 resistance level on strong corporate earnings and receding global economic worries

Australian shares rallied 0.9 percent, breaking the 5,000 resistance level, led by the Commonwealth Bank of Australia, as investor sentiment was bolstered by a strong earnings season so far.

The S&P/ASX 200 index ended 44.7 points higher to 5,003.7 points. The market has not broken above the 5,000 psychological barrier in almost three years.

Leighton Holdings, Australia's largest construction company, surged 11.2 percent after it reported a smaller-than-expected 3 percent fall in second-half net profit and forecasted a stronger 2013.

The Commonwealth Bank of Australia soared 2.4 percent to an all-time high of A$67.00 after posting record first half earnings of A$3.7 billion.

Amid earnings misses, Ansell slumped 6 percent after it reported a drop in first-half net profit to A$55 million from A$64 million last year.

New Zealand's benchmark NZX 50 index finished flat at 4,221.3 points.

In Southeast Asia, Singapore's Straits Times Index closed up 0.9 percent while Malaysia's KLCI Composite Index ended 0.45 percent higher.

India's BSE Index finished up 0.3 percent and the 50-share NSE Index closed up 0.2 percent.