KUBTY Kubota Corporation (PK)

Asian shares were broadly mixed Wednesday on weakness in U.S. equities and continued worries that global central banks will soon reverse their easing schemes.

Japan's Nikkei Stock Average was down 0.2%, taking its week-to-date loss to 1.6%. The Shanghai Composite Index was 0.3% lower, but the Hang Seng Index was up 0.2%.

Overnight, the main U.S. indexes closed lower as investors focused on possible action by the Federal Reserve at its meeting next week. According to the Chicago Mercantile Exchange's FedWatch tool, the market believes there is a 15% chance of a rise in interest rates in September, but the probability of an increase in December has risen to 56.5%.

"There's a lot of uncertainty as markets are unable to find a clear explanation on what's going to happen with the upcoming Fed meeting," said Alex Wijaya, a senior sales trader at CMC Markets Ltd. "There's a lot of mixed messages."

In Japan, banks were particularly hard hit Wednesday on speculation that the Bank of Japan will reduce its purchases of superlong bonds to steepen the yield curve, while maintaining the negative rate on excess reserves.

Bank stocks in the country were hurt by speculation that the BOJ will announce an interest-rate cut at next week's policy meeting, taking rates deeper into the negative territory. Lower rates hurt banks' net interest margins. Mitsubishi UFJ Financial Group Inc. was down 3.1% Wednesday, Shinsei Bank Ltd. was 1.9% lower and Sumitomo Mitsui Financial Group Inc. was off 1.6%.

"[A steeper curve] would be negative for bank stocks, but good for life insurance companies," says Tomoichiro Kubota, senior market analyst at Matsui Securities.

Elsewhere, commodity-producing countries shrugged off rising oil prices, with the S&P/ASX 200 index edging up 0.1%, while Singapore's Strait Times was down 0.6% and Malaysia's Bursa fell 0.9%. Brent, the global benchmark, was last up 0.3% at $47.24 a barrel.

The market remains skeptical following the announcement by the International Energy Agency on Tuesday that global oil supply would outpace demand well into next year, a reversal of its position a month ago, when it said that the market would show no surplus this year.

Looking ahead, the market is waiting for China new-loans data. Markets in Korea are shut Wednesday through Friday, Chinese markets are closed Thursday and Friday, while Hong Kong, Taiwan and Malaysia are shut on Friday.

Kosaku Narioka contributed to this article.

Write to Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

September 13, 2016 23:45 ET (03:45 GMT)

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