Asian stocks fell broadly on Wednesday as investors adopted a cautious stance ahead of the outcome of the two-day policy meeting of the U.S. Federal Reserve. With Fed Chairman Ben Bernanke scheduled to hold a press conference shortly after the meeting, investors wait to hear what he has to say about possible tapering of bond purchases and the future course of Fed policy.
Japanese shares bucked the regional downtrend to end sharply higher after data from the Finance Ministry showed Japan's exports increased 10.1 percent year-over-year to 5.767 trillion yen in May, the biggest gain in three years. The merchandise trade deficit came in at 993.916 billion yen, slipping into the red for the 10th consecutive month.
The Nikkei average jumped 1.8 percent to hit a one-week high, while the broader Topix index climbed 1.9 percent. The dollar slipped against the yen after rising to Y95.66 before the market open. KDDI rallied 5.9 percent and SoftBank shares soared 4.2 percent after U.S. satellite TV operator Dish Network dropped out of the bidding race for Sprint Nextel. Advantest and Tokyo Electron rose 2-3 percent supported by a sharp rise in the Philadelphia Semiconductor Index.
Shipping firms rallied after the Baltic Dry Index, a broader gauge of freight rates for commodities, rose for a ninth consecutive session in London on Tuesday. Kawasaki Kisen Kaisha soared 9.5 percent, Mitsui O.S.K. Lines added a percent and Nippon Yusen KK advanced 4 percent. Astellas Pharma climbed 4.3 percent on reports the company is looking to sell its dermatology assets.
Bank of Japan Governor Haruhiko Kuroda said today that Japan's economy is on a steady path toward recovery and financial markets will gradually regain stability, reflecting positive momentum in economic activity. The rise in some market indicators of inflation expectations has come to a pause, he said during a semiannual hearing on monetary policy in Parliament.
China's Shanghai Composite index fell 0.7 percent to a six-month low, with a worsening cash crunch and speculation that the government will step up property curbs dampening sentient. Hong Kong's Hang Seng index dropped 1.1 percent, dragged down by cyclical stocks.
Australian shares followed positive Wall Street cues to end sharply higher, with miners pacing the gainers. The benchmark S&P/ASX 200 closed up 47 points or a percent to 4,861. Rio Tinto rose 1.6 percent amid reports it has laid off senior employees at its Western Australian iron ore headquarters in a bid to cut costs. Rival BHP Billiton added 0.9 percent and Fortescue Metals Group advanced 1.8 percent, while gold miner Newcrest ended little changed.
Among major banks, ANZ, Commonwealth and Westpac shed between 0.1 percent and 0.8 percent, but NAB shares added a percent. UGL rallied 2 percent on reports the company has secured new contracts worth A$120 million across its global property services business.
On the macroeconomic front, a leading indicator of Australian economic activity continued to signal above-trend growth for the economy in the coming quarters, a report from Westpac and Melbourne Institute showed. The annualized growth rate of the leading index, which indicates the likely pace of economic activity three to nine months into the future, stood at 5.4 percent in April, comfortably above its long term trend of 3 percent.
In another report, the Conference Board said that its leading economic index for Australia increased 0.3 percent in April from the previous month, marking its fourth straight monthly rise. The coincident economic index also increased 0.3 percent in April following a 0.2 percent increase in March.
South Korea's Kospi average closed 0.7 percent lower at 1,888 on foreign fund selling. Tech shares led the decliners, with Samsung Electronics, LG Display and LG Electronics all dropping more than a percent each. Automaker Hyundai Motor gained 1.5 percent on expectations of solid volume growth in the second-quarter.
New Zealand shares retreated due to selling pressure in stocks like Sky Network Television and Chorus. The benchmark NZX-50 slipped 17 points or 0.4 percent to 4,446, with 21 of its components declining. Sky Network Television tumbled 4.6 percent after rival Coliseum Sports Media won a three-year deal for the rights to broadcast all 380 games of the English football Premier League via an online platform. Network operator Chorus fell 3.1 percent on selloff by foreign funds.
Heavyweights Fletcher Building and Telecom dropped 0.4 percent and 1.3 percent, respectively. In economic news, New Zealand's annual current account deficit narrowed to NZD10.1 billion in March, equivalent to 4.8 percent of GDP, data from Statistics New Zealand showed.
Elsewhere, the benchmark indexes in India, Indonesia, Malaysia, Singapore and Taiwan were down between 0.1 percent and 0.6 percent.
The major U.S. averages rose about a percent each on Tuesday as soft inflation data suggested the Federal Reserve will maintain a status quo on interest rates. Housing starts rose 6.8 percent to an annual rate of 914,000 in May following a 14.8 percent drop in the previous month, while consumer prices rose slightly in the month following two months of declines, separate reports showed.
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