Japanese stocks retreated Wednesday as worries about the yen's recent strength pressured exporters, while banks lost ground on concerns they could have to raise capital.
The Nikkei 225 index in Tokyo stumbled 81.09 points, or 0.8%, to 10,312.14.
In Hong Kong, the Hang Seng index gave back 218.77 points, or 1% -- or about half of Tuesday’s gain -- to end the session at 20,851.04.
Japanese banks were trading lower after Goldman Sachs wrote in a report they were "amongst the more vulnerable to implementation of new global capital regulations."
The brokerage cited "low levels of internal capital generation to avert capital raisings" and cut its price target for Mizuho Financial Group.
Mizuho shares fell 2%, with Mitsubishi UFJ Financial Group dropping 3% and Sumitomo Mitsui Financial Group losing 2.7%.
Exporters were hurt by the yen's recent gains, with Toyota Motor falling 1.8% and Sony sliding 2.2%. "The market is worried that the dollar may fall to 90 yen near-term," said Mizuho Securities' senior technical analyst Yutaka Miura.
In foreign-exchange trade, the U.S. dollar was recently buying 92.47 yen, compared with 92.27 yen in late New York trade, while the euro was fetching 133.92 yen compared with 133.71 yen.
Against the dollar, the euro changed hands for $1.4479 U.S. against $1.4489 U.S.
Resource stocks were supported, despite most regional indexes ending in the red, after crude-oil futures Tuesday posted their biggest single-day rise since Aug. 19. Metals prices were also broadly higher with spot gold above the $1,000 U.S.-a-troy-ounce level.
BHP Billiton climbed 0.3% and Rio Tinto added 0.7%, while Newcrest Mining rose 1.5% in Sydney.
Japan Petroleum Exploration rose 1.9% and commodities trader Mitsubishi Corp. advanced 1.6% in Tokyo.
Gains in resource shares traded in Sydney were capped after the Australian Bureau of Statistics reported that retail sales fell 1% in July from the previous month, compared with expectations of a 0.5% rise.
"It's confirmation that the consumer is still very fragile," said IG Markets analyst Cameron Peacock.
The weaker-than-expected sales data pulled the Australian dollar down from its one-year high of $0.8662 U.S. The currency was recently buying $0.8579 U.S. Still, the Australian dollar was widely expected to continue its recent uptrend, thanks to a strong Australia consumer-sentiment survey and higher commodity prices.
Data released by Westpac/Melbourne Institute showed its consumer-confidence index rose 5.2% for September to its highest level since July 2007.
In Hong Kong, shares of personal-computer maker Lenovo Group tumbled 5.7% in heavy trading following reports that private-equity funds including TPG and General Atlantic LLC sold shares valued at $133 million U.S. in the company.
Trading in shares of Genting Singapore was suspended before the company announced a rights issue to raise 1.63 billion Singapore dollars ($1.14 billion U.S.) to boost capital and expand its businesses.
The company is offering up to 2.04 billion shares at 80 Singapore cents each, or a 33% discount to its last traded price, with shareholders eligible to subscribe for one share for every five they currently hold.
Taiwanese shares were supported after Economic Daily News reported that the minister of finance may retain his position in the incoming cabinet. It "indicates the new cabinet is likely to follow the policies of the old cabinet," said Capital Securities Assistant Vice President Diana Wu.
Financials were among gainers, with Cathay Financial Holding up 0.4% and Chinatrust Financial Holding rising 0.5%.
Japanese government bonds opened lower after Tuesday's selloff in U.S. Treasurys, but came back as Tokyo shares fell. The September JGB futures contract, which expires Thursday, ended up 0.18 at 139.26 points, while the 10-year cash JGB yield was flat at 1.325%
CHINA
Chinese stocks edged higher for a seventh session despite a broad decline in regional markets after a string of higher finishes recently.
Shanghai’s 300 Composite Index gained 23.94 points, or 0.8%, to 3,194.91.
Resource-sector shares paced the gains in Shanghai and outperformed in some other markets on higher commodity prices.
In Shanghai, shares of Baoshan Iron & Steel rose 3.1%, Yunnan Chihong Zinc & Germanium jumped 5% and PetroChina added 0.5%, while Jiangxi Copper rose 1.9% in Hong Kong.
Elsewhere:
Singapore’s Straits Times Index lost 10.43 points, or 0.4%, to 2,650.48
South Korea’s Kospi index shed 11.92 points, or 0.7%, to 1,607.77
Taiwan’s Taiex fell 63.27 points, or 0.9% to 7,250.72
New Zealand’s NZX 50 Index was off 5.14 points, to 3,116.41
Australia’s S&P/ASX 200 stepped back 1.60 points to 4,522.20.
