Japan's Nikkei tumbled after the government moved to delay a sales-tax hike for more than two years, bucking mostly higher markets around the region.
In Japan, the Nikkei 225 tumbled 393.18 points, or 2.3%, to 16,562.55
The Japanese yen strengthened against the U.S. dollar, trading at 109.1, compared with levels above 111 yen on Tuesday after Japan's Prime Minister Shinzo Abe announced a delay of the consumption tax hike until 2019 because of growing softness in the economy. A strong yen is generally a negative for Japanese stocks.
Analysts are also concerned that by lessening the chances of an economic slowdown, the move may put the kibosh on further Bank of Japan easing.
In Hong Kong, the Hang Seng index gained 98.24 points, or 0.5%, to 20,859.22
Japanese equities were down across the board, with even consumer-related stocks that might have benefited from the consumption tax hike delay, taking a tumble. Takashimaya was trading down 3%, and Fast Retailing was lower by 2.7%.
Airbag maker Takata shares shed 5.1% after Ford Motor announced it would recall 1.9 million vehicles with defective airbag inflators made by Takata
Australia's retail sales rose 0.2% in April from the previous month, compared with economists' expectations for a 0.3% increase, led by apparel and footwear retailing, food and beverage services and household goods, according to the Australian Bureau of Statistics.
Energy shares in the region were lower; Australia's Santos fell 2.3% and Woodside was 0.6% lower, while Japan's Inpex slipped 3.2%
In other markets
In Shanghai, the CSI 300 Index regained 6.55 points, or 0.2%, to 3,167.10
In Korea, the Kospi Index regained 2.39 points, or 0.1%, to 1,985.11
In Singapore, the Straits Times Index gained 4.55 points, or 0.2%, to 2,795.09
In Taiwan, the Taiex Index dropped 41.14 points, or 0.5%, to 8,556.02
New Zealand’s NZX 50 fell 19.28 points, or 0.3%, to 7,003.12
The ASX 200 fell 44.28 points, or 0.8%, to 5,378.89
