Asian Shares Mixed Amid China-Japan Row

(RTTNews) - Asian stocks ended mixed on Wednesday as tensions between China and Japan escalated, and weak U.S. data spurred hopes for more rate cuts.

Federal Reserve Governor Stephen Miran has called for aggressive rate cuts exceeding 100 basis points in 2026, arguing that current tight monetary policy is dragging down the world's largest economy.

The dollar moved in a tight range as investors looked ahead to the release of some key U.S. economic readings this week that could set the tone for the Federal Reserve's rate outlook.

Gold dropped nearly 1 percent on profit taking after climbing to a more than one-week high earlier, driven by escalating geopolitical tensions.

Oil extended steep overnight losses after the United States and Venezuela reached an agreement allowing the export of up to $2 billion worth of Venezuelan crude oil to U.S. ports.

U.S. President Donald Trump said between 30 million and 50 million barrels of oil would be sold to the U.S. at market prices, with proceeds overseen by U.S. Energy Secretary Chris Wright.

China's Shanghai Composite index finished marginally higher at 4,085.77 after a choppy session amid tensions with Japan and optimism over artificial intelligence.

Hong Kong's Hang Seng index fell 0.94 percent to 26,458.95, with tech stocks coming under selling pressure.

Amid rising tensions over Taiwan, China's commerce ministry said that exports of products with potential military use to Japan would be banned immediately.

Japanese markets fell sharply from a record high hit the precious day as rising geopolitical tensions prompted traders to book profits.

Japan has lodged a strong protest against Beijing's trading curbs on dual-use goods that threaten to impact more than 40 percent of Chinese exports to Japan.

The export control list features more than 800 items, ranging from chemicals, electronics and sensors to equipment and technologies used in shipping and aerospace.

The Nikkei average dropped 1.06 percent to 51,961.98 while the broader Topix index settled 0.77 percent lower at 3,511.34.

Uniqlo brand owner Fast Retailing lost 2.7 percent and chip-testing equipment maker Advantest slumped 4.4 percent.

Seoul stocks closed higher to set a fresh record high, with tech, shipbuilding and auto stocks pacing the gainers. The Kospi average surged 0.57 percent to 4,551.06.

Hyundai Motor soared 13.8 percent and its smaller affiliate Kia Corp climbed 5.6 percent after Hyundai-owned Boston Dynamics publicly demonstrated its humanoid robot Atlas for the first time Monday at this year's CES tech show.

Australian markets eked out modest gains after data showed consumer prices in the country rose by less than forecast in November. However, the trimmed mean measure of core inflation suggested some sticky inflationary pressures.

The benchmark S&P/ASX 200 edged up by 0.15 percent to 8,695.60 as strong commodity prices boosted mining stocks. The broader All Ordinaries index closed 0.23 percent higher at 9.018.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 index rose 0.38 percent to 13,715.02, marking a record closing high.

Overnight, U.S. stocks notched fresh records as investors continued to shrug off worries about the U.S. attack on Venezuela over the weekend and looked ahead to the release of key economic data this week that could influence the Federal Reserve's rate trajectory.

Data showed the U.S. service sector expanded at the weakest pace of growth since April, bolstering rate cut hopes.

The Dow rallied 1 percent and the S&P 500 gained 0.6 percent to reach new record closing highs while the tech-heavy Nasdaq Composite advanced 0.7 percent.