The yen's surge -- up 9.6 percent against the dollar so far this year -- led to more warnings of action from the Japanese who are concerned about a strong currency dampening exports. A senior Japanese finance ministry official said it would take steps in the market as needed.
Japanese stocks edged up on Thursday in choppy trade, snapping a seven-day losing streak as buying in defensive stocks offset weakness in exporters which lost ground on the yen's strength.
The Nikkei share average gained 0.2 percent to 15,749.84.
The broader Topix rose 0.4 percent to 1,272.64 and the JPX-Nikkei Index 400 advanced 0.5 percent to 11,484.43.
China stocks weakened on Thursday morning, as investors awaited a slew of Chinese economic data and remained cautious due to signs of increasing default risks in the country's corporate bond market.
Both the blue-chip CSI300 index and the Shanghai Composite Index were down 0.8 percent at the midday break, to 3,231.45 points and 3,027.47 points respectively.
In Hong Kong, the Hang Seng index was flat, while the Hong Kong China Enterprises Index dipped 0.8 percent.
Over the next week, China will release some key economic data for March. A Reuters poll showed that China's exports likely returned to growth for the first time in nine months in March while the pace of bank lending may have picked up.
Other data that will be released include China's forex reserves, inflation and money supply.
"These data will be closely watched by investors who are looking for fresh evidence that the economy is stabilizing," said Zeng Yan, analyst at Zhongtai Securities in Shandong.
Adding to investor caution on Thursday were signs of more troubles in China's debt market, as state-owned Chinacoal Group Shanxi Huayu Energy failed to make a payment on bonds worth 600 million yuan ($92.6 million).
Underscoring increasing stress, China's top planning agency has ordered issuers of so-called enterprise bonds and their underwriters to assess the risks of default and report back to the government as part of a nationwide campaign to limit systemic financial risk.
"Potential default threatens to push up borrowing costs, and is negative to stocks as well," Zeng said.
While shares in China fell across the board, sectors in Hong Kong including IT and utilities managed to stay positive.
Hong Kong-listed shares of Chinese telecom equipment maker ZTE Corp tumbled nearly 10 percent as trading resumed for the first time since the U.S. Commerce Department imposed export restrictions on the firm last month for allegedly violating sanctions against Iran.
But ZTE's Shenzhen-listed shares edged up 0.9 percent.
Hong Kong stocks were little changed on Wednesday, with financial shares curbing gains on the main index as investors await fresh cues for direction.
The Hang Seng index rose 0.2 percent, to 20,206.67, while the China Enterprises Index lost 0.1 percent, to 8,668.63 points.
Most sectors rose but financial shares underperformed, losing 0.5 percent, as Chinese banks are under margin pressures from a slowing economy and rising bad debt.
Chi Lo, economist at BNP Paribas Investment Partners pointed out that some market players believe that China would see a banking crisis soon, with losses expected to amount to $3.5 trillion. But such an "Armageddon" scenario was not a fair bet on China.
Reference: Reuters
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