Japanese stocks have been buoyed in recent weeks by positive economic data, but profit-takers have stepped in to pocket gains in such sectors as pharmaceuticals and insurance.

"Investors now have a strong sense that the market is in a stalemate," said the general manager of Yamamaru Securities, who insisted on anonymity.

Tokyo stocks were also undermined by overnight declines in New York, where falling oil prices and weaknesses in other commodities sent stocks lower, with investors cashing in stocks that led Wall Street's early January rally.

In currency trading, the U.S. dollar bought 117.86 yen on the Tokyo foreign exchange market late Wednesday, down 0.23 yen from late Tuesday in New York. The euro fell to US$1.1970 from US$1.1973 in New York.

Thai shares fell, led by losses in energy blue chips as global oil prices fell. The Stock Exchange of Thailand index closed down 8.74 points, or 1.2%, at its intraday low of 734.63, its lowest finish since Jan. 4.

Indonesian shares fell on profit-taking after four days of gains. The Jakarta Stock Exchange Composite Index ended down 21.19 points, or 1.7%, at 1,238.17. The main index rose 2.6% over the previous four sessions.

Malaysian shares dropped, led by blue chips as foreign and local funds locked in recent gains on worries of a possible interest rate hike by the end of the month. The weighted Composite Index of 100 blue chip stocks closed down 4.92 points, or 0.5%, at 918.92.

Philippine shares declined sharply, spooked by news that Moody's Investors Service was set to issue a credit ratings report on the country that may fall short of market expectations. The benchmark 30-company Philippine Stock Exchange Index fell 36.46 points, or 1.7%, to 2,060.92, its worst finish since Dec. 19, when it ended at 2,024.70.

South Korean shares fell for the fifth session in six as major stocks declined on selling by foreign investors. The Korea Composite Stock Price Index, or Kospi, lost 1.6%, or 21.29 points, to 1,310.99.

Shares rose on speculation that China Petroleum & Chemical Corp., or Sinopec, would take four of its domestically traded companies private. The benchmark Shanghai Composite Index gained 0.6% to 1,290.06.

Shares closed lower on across-the-board selling as sentiment turned bearish due to the overnight weakness on Wall Street followed by the sharp retreat in Tokyo. The Straits Times Index ended down 20.48 points, or 0.8%, at 2,428.25.

Australian shares dropped sharply after big falls in gold and oil prices overnight triggered a sell-off among investors. The benchmark S&P/ASX200 index lost 74 points, or 1.5%, to 4,831.4.

Taiwan's shares fell as weakness on Wall Street overnight and in Asian stocks sparked an across-the-board sell-off. The Weighted Price Index of the Taiwan Stock Exchange dropped 95.97 points, or 1.4%, to 6,624.11.

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