China indexes extended weekly and monthly losses and trimmed first-half gains after piecemeal economic reforms failed to revive consumer and investor confidence.
The yen drifted below the low last seen in 1986, prompting talks of market intervention but raising long term uncertainty. Currency traders are fearing that the yen may sink as low as 170 against the dollar.
China's industrial profit growth plunged in May, confirming the fragile and uneven economic recovery as policymakers struggle to find ways to revive economic growth.
Benchmark stock indexes advanced for the second consecutive day, the yen hovered near a three-decade low, and the yield on Japanese government bonds stayed above 1%.
Stocks in Shanghai and Hong Kong struggled amid rising trade tensions with Canada and the European Union. Property stocks were in focus amid rising creditor actions against residential developers.
The Bank of Japan policy members appear to be divided in deciding the future course of interest rates. The yen drifted to a three-decade low level that generally prompts market intervention from the central bank.
Benchmark indexes traded higher after bargain hunters returned to seek values in the tech, financial, and real estate sectors. The Chinese premier reiterated China's annual GDP growth target of 5%.
Japan's consumer price inflation accelerated in May, and core inflation also advanced, reflecting the ending of energy subsidies to households. Manufacturing sector growth slowed in June, but the sector expanded for the second month after contracting for a year.
Market indexes in China remained under pressure after the People's Bank of China fixed the yuan at a slightly lower rate, reflecting a selloff in overnight trading.
Japanese investors look forward to the release of consumer inflation data and an update on business activities in the manufacturing and service sectors on Friday.
The People's Bank of China held steady its key lending rates used for consumer and residential mortgage loans but failed to provide additional supportive measures to revive the property market.
Japan's exports in May surpassed expectations and rose for the sixth month in a row amid a weak yen and strong demand from the U.S., China, Taiwan, and South Korea. Imports jumped to a five-month high, indicating improving domestic demand.
