Japanese stocks rebounded from Tuesday's selloff as most Asian markets closed mixed on Wednesday ahead of key central bank decisions as well as major earnings reports due in Japan and South Korea.
The Nikkei 225 recovered 281.78 points, or 1.7%, to 16,664.82, after a more-than-200-point collapse Tuesday, getting additional octane from a report that Prime Minister Shinzo Abe and his government will compile a stimulus package of more than $265 billion U.S. to prop up Japan's flagging economy.
In Hong Kong, the Hang Seng Index improved 89.26 points, or 0.4%, to 22,218.99
The stimulus package, worth 28 trillion yen, which exceeds initial estimates of around 20 trillion yen, includes 13 trillion yen in "fiscal measures", according to a Reuters report.
In the wake of the reports, the yen weakened, with the U.S. dollar/yen pair rising as high as 106.53, compared with levels near 105.12 in mid-morning trade on Wednesday and its last close at 104.64. But by late afternoon local time, the dollar/yen pair retreated to 105.50.
Nintendo shares closed down 5.5%. The Japanese game console maker reported earnings after market close, where the company posted an operating loss of 5.13 billion yen in the April-June quarter.
Nintendo shares had risen sharply since July 6, when the "Pokemon Go" app was launched in the U.S., Australia and New Zealand, with the stock at one point more than doubling in value on expectations the app would give Nintendo's business a boost.
Shares of Itochu tumbled 6.3%, after short-seller Glaucus Research Group took aim at the Japanese trading house's accounting practices
In Australia, markets closed near flat. Shares of major miners rose, with Rio Tinto closing up 1.9%, Fortescue higher by 7% and BHP Billiton climbing 3.1%.
The Australian dollar briefly strengthened on the back of mixed inflation data for the second quarter.
Data released by the Australian Bureau of Statistics on Wednesday showed the consumer price index (CPI) for all groups was up 0.4% on quarter, in line with a Reuters poll. Weighted median CPI was up 0.4% on-quarter and up 1.3% on-year.
The data had been closely watched for clues on whether the Reserve Bank of Australia might cut interest rates ahead.
The Aussie climbed from levels near $0.7500 U.S. before the data to as high as $0.7564, before retreating to $0.7486 in the evening local time.
In company news, Fortescue released its June 2016 quarterly production results before market open. The miner reported shipments of 43.4 million tons of iron ore for the quarter, a slight uptick from the 42 million tons shipped in the previous quarter. Cash production costs for the quarter were at $14.31 U.S. per wet metric ton (mt), a 3% reduction compared with the previous quarter and down 35% on-year.
For its fiscal 2017 guidance, Fortescue said it expects shipment of 165-170 million tons and its cash production costs are expected to be around $12-$13 per wet mt.
Analysts said markets are jittery ahead of the U.S. Federal Open Market Committee's monetary policy decision due in the afternoon local time Wednesday.
In other markets
The Shanghai CSI 300 faded 51.35 points, or 1.6%, to 3,218.24
The Taiex Index in Taiwan bolted higher 38.6 points, or 0.4%, to 9,063.39
In Singapore, the Straits Times Index acquired 8.05 points, or 0.3%, to 2,941.49
In Korea, the Kospi eased 2.29 points, or 0.1%, to 2,025.05
In New Zealand, the NZX 50 fell 8.49 points, or 0.1%, to 7,301.9
The ASX 200 gained 2.22 points to 5,539.69
