Asian equity markets traded mostly higher on Wednesday, supported by positive overnight momentum on Wall Street and rising U.S. stock index futures, after softer-than-expected American inflation data reduced bets on a near-term Federal Reserve interest rate hike.

However, broader gains across the region remained capped as escalating geopolitical tensions in the Middle East fueled investor caution.

In commodities, crude oil climbed toward $80 per barrel, while safe-haven gold eased below $4,050 an ounce. 

The benchmark KOSPI led regional gains, surging more than 6% to around 7,300, driven by a global technology rally. On the economic front, South Korea’s seasonally adjusted unemployment rate fell slightly to 2.7% in June 2026 from 2.8% in May.

Japan's (NKY:IND) rose 1.13% to above 68,300, while the broader Topix Index advanced 1% to 4,080, the Japanese yen steadied around 162 per dollar.

Domestic data revealed an unexpected drop in May machinery orders, pointing to broad business investment weakness, though the July Reuters Tankan index for manufacturers held steady at +13.

China's (SHCOMP) fell 0.09% to 3,974, while the Shenzhen Component slipped 0.3% to 14,891. In currency markets, the offshore yuan strengthened to approximately 6.76 per dollar.

On the data front, China's economy expanded 4.3% Y/Y in Q2 2026, deceleration from the 5.0% growth recorded in Q1 and missing market consensus forecasts of 4.5%. A 5.7% drop in H1 fixed-asset investment and a 9.7% plunge in June coal production weighed on the market, offsetting a three-month high in industrial production (5.3%) and a 1% retail sales rebound. 

China's surveyed urban unemployment rate edged down to 5.0% in June 2026, in line with market expectations and down from 5.1% in the prior month.

Hong Kong (HSI) rose 1.50% to 24,660, its highest level since June 2026.
 

Australia (AS51) shares rose 0.24% to 8,848, snapping a two-day lull and touching their highest level in a week. The Australian dollar strengthened to around $0.698.