Asian stocks ended mixed on Wednesday as investors nervously awaited key US jobs data that could help determine the Federal Reserve's next interest rate decision, while the yen is in focus as it wallows around four-decade lows.

On the mainland, the Shanghai Composite Index ended up 18 points, or 0.44 percent, at 4,112.

The Shenzhen Component index closed down 86 points, or 0.53 percent, lower at 16,119 while the ChiNext was almost 82 points, or 1.89 percent, lower at 4,260.

In Tokyo, the Nikkei share average closed higher for a third consecutive session, supported by AI-related shares, though fresh hurdles in US-Iran peace negotiations and investor caution in a volatile market limited gains.

The benchmark Nikkei 225 advanced 412 points, or 0.59 percent, to close at 70,474, paring an earlier surge of up to 2.7 percent. The broader Topix ended 16 points, or 0.42 percent, higher at 4,011.

In Seoul, South Korean shares fell 173 points, or 2.04 percent, to 8,303 as overseas investors booked profits after a blistering second quarter, even as the country's exports beat forecasts on record chip sales.

The index rose 68 percent in the June quarter, the steepest since 1998. It has risen 97.04 percent so far this year.

Regional markets enjoyed a fruitful first half of the year thanks to a surge in tech stocks, but ructions in the sector over the past few weeks have raised concerns that a bubble has formed.

The race by firms to get ahead of the curve in the AI boom has seen them pump trillions of dollars into the industry, sparking an eye-watering global rally that has sent some big names stratospheric, including US chip giant Nvidia and South Korea's SK Hynix.

But fears are growing that those valuations have now gone too far, investors might not see returns as early as expected and US interest rates could start to go up.

"While AI remains a long-term structural growth theme, investors are becoming increasingly focused on valuations and whether the enormous investment in AI infrastructure will translate into earnings growth quickly enough to justify current share prices," wrote City Index's Fiona Cincotta.

"At the same time, a more hawkish Federal Reserve has weighed on high growth stocks."

Cincotta said markets were eyeing a 60 percent chance of a 25-basis-point increase in September, with some even predicting three before January. (Agencies)


Edited by Edmond Fong