Japanese stocks edged up on Wednesday but retreated from three-week highs earlier in the session as the yen firmed marginally against the dollar, hampering exporters' prospects.
The Nikkei share average ended 0.2 percent higher at 16,906.54 after climbing as high as 17,099.36 earlier in the day, encouraged by Wall Street's performance overnight and the dollar trading above 109 yen, before the Japanese currency again gained strength.
Shanghai stocks had their worst performance in eight weeks on Wednesday, tumbling more than 2 percent and breaching a key technical support level as investors who are increasingly worried about the economy took profits from a long rally.
Although no specific event appeared to trigger the abrupt sell-off, traders and analysts listed several contributing factors, including reduced stimulus hopes, disappointment over economic restructuring, rising credit risks and lofty valuations of small-caps.
The Shanghai Composite Index slumped 2.3 percent to 2,972.58 points, breaching 3,000 - seen by many as a key technical support level.
Hong Kong stocks suffered their biggest loss in two weeks on Wednesday, falling roughly 1 percent, as a sharp sell-off in mainland China markets soured investor sentiment.
The Hang Seng index fell 0.9 percent, to 21,236.31, while the China Enterprises Index lost 1.2 percent, to 9,134.42 points.
The market was relatively calm in early morning trade after overnight gains in U.S. and Eruopean stocks> But key indexes were then dragged lower by the Shanghai market, which posted its worst performance in eight weeks on Wednesday.
All main sectors fell in Hong Kong, with energy and utility sectors among the biggest decliners.
Reference: Reuters, AP
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