Australia’s S&P/ASX 200 was about 1% lower. Retail sales in Australia rose 0.9% in May compared to April, the same increase in April from March.
MSCI’s broadest index of Asia-Pacific shares declined 1.33%.
Shane Oliver, chief economist at AMP, said markets will remain vulnerable until there’s more certainty about whether a recession can be averted.
“Even if we don’t have a recession, we’re gonna see quite a significant slowdown in global growth, in growth in Asia, and that’s going to weigh on company profits, so I suspect there is more downside,” he told CNBC’s “Squawk Box Asia” on Wednesday, adding that the market may only bottom in September or October.
“I’m still optimistic on a 12-month view, but for the next three or four months, I think there’s more downside,” he said.
China quarantine changes
Elsewhere in the region, China cut the quarantine period for international travelers on Tuesday, in a step away from its strict Covid controls that have been in place for more than two years.
People arriving from overseas will now need to quarantine for seven days upon arrival and three days at home, compared to up to 21 days in a centralized facility previously.
Mainland Chinese markets closed higher on Tuesday, but the Shanghai Composite slipped 0.77%, and the Shenzhen Component declined 1.165% on Wednesday.
Trip.com’s US-listed shares popped nearly 11% on Tuesday, and extended gains in after hours trade. Cathay Pacific’s stock closed 6.4% higher on the news on Tuesday, but declined 1.4% on Wednesday.
China Eastern and China Southern airlines both rose more than 5% on Tuesday, but fell on Wednesday.
Bloomberg also reported, citing people familiar with the matter, that Hong Kong’s incoming administration is considering reducing hotel quarantine to five days, down from seven.
Currencies and oil
The US dollar index, which tracks the greenback against a basket of its peers, was at 104.406, bouncing back from below 104 earlier this week.
The Japanese yen weakened past the 136 level against the dollar again, after strengthening and holding in the past few sessions. It last changed hands at 136.19. The Australian dollar was at $0.6905.
Oil futures fell in Asia’s morning trade. US crude futures were down 0.49% at $111.21 per barrel, while Brent crude futures lost 0.79% to $117.05per barrel.
— CNBC’s Evelyn Cheng contributed to this report.