Asian markets were mixed in cautious trade on Wednesday as concerns over developments in Europe continued to weigh on sentiment.
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Uncertainty remained over the situation in Cyprus, where a plan to tax local bank deposits failed to pass after the ruling Democratic Rally party abstained from voting. The tax was proposed over the weekend as a way to help fund a bailout for the country's banks.
The proposed plan unsettled investors as it raised fears that the controversial tax could undermine the confidence of savers across the euro-zone. With the tax now rejected, the form of the country's bailout remains unclear, but fears over the risk of contagion diminished after the European Central Bank said that it would provide support to the country's banks.
"The Cyprus issue is far from over," said Stan Shamu, market strategist at IG Markets in Melbourne. "I don't think it will be a situation where the ECB has stepped in and we don't have to worry about it."
The euro was slightly lower in Asia, at $1.2873 compared with $1.2883 late Tuesday in New York, adding to overnight selling that pushed the single currency down 0.6% in the previous session.
Japanese markets were shut for a public holiday on Wednesday, though the yen strengthened against the U.S. dollar�the greenback was recently at �95.03 compared with �95.16 late in New York.
With Japan closed, the next catalyst for the exchange rate between the dollar and the yen could be the Federal Reserve's policy meeting. The U.S. central bank will announce its policy statement later in the global day, which will be scrutinized for clues on the direction of monetary policy in the world's largest economy.
Stocks in Australia were lower, with the S&P/ASX 200 down 0.5% at 4962.10, after hitting a six-week low of 4937.50 in early trading, concerns about Europe continued to weigh on the market.
Miners in Sydney were lower after Goldman Sachs lowered its iron ore price forecast. Rio Tinto fell 2.4% and BHP Billiton lost 2.4%.
South Korea's Kospi Composite was down 0.4% and Singapore's Straits Times Index lost 0.3%.
The next major data point scheduled to come out in Asia is China's preliminary manufacturing data for March, out on Thursday. The last set of economic numbers to come out of China gave a mixed picture of the recovery in Asia's largest economy, adding to concerns that the government could become stricter on the property market in response to a pickup in house prices.
Chinese stocks were higher ahead of the data, with Hong Kong's Hang Seng Index up 0.9% and the Shanghai Composite Index 2.1% higher.
Banks in Shanghai rebounded, with Bank of China up 2.1% and China Construction Bank rising 2.8%, while their counterparts in Hong Kong added 2.0% and 2.5% respectively.
Honghua Group fell 2.5% in Hong Kong after the rig manufacturer's net profit for 2012 more than tripled to 529.5 million yuan, slightly higher than expectations. The strong earnings growth was well-flagged as the company issued positive earnings guidance in January and the stock jumped 5% on Tuesday just before the results came out.
Write to Daniel Inman at daniel.inman@wsj.com
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