Asian shares mixed after Japan posts contraction

HONG KONG (AFP) - Asian shares were mixed Wednesday, with the Tokyo market shrugging off data showing a contraction in the Japanese economy as investors awaited the release of key US and Chinese data.

Japan's benchmark Nikkei 225 index added 0.16 per cent by midday after the government announced that the world's number three economy shrank by 1.7 per cent quarter on-quarter in the April-June period as a sales tax hike dented activity.

Shanghai was up 0.12 per cent while Hong Kong traded flat ahead of the government's release of key data for July, including retail sales and industrial output, later Wednesday.

Seoul was up 0.29 per cent but Sydney was down 0.36 per cent.

Investors were also cautiously eyeing geopolitical tensions in Ukraine as a convoy of 262 Russian trucks headed towards the border as Kiev vowed to block the aid mission from its territory over fears it was a ploy to bolster pro-Kremlin rebels.

The United States and European Union have already imposed an array of sanctions on Russia in response to what they see as Moscow's military support for rebels in Ukraine.

The Dow Jones Industrial Average dipped 0.06 per cent to 16,560.54 on Tuesday as new data showed investment sentiment in Germany, the eurozone's biggest economy, was taking a hit from the crisis over Russia and Ukraine.

The widely watched investor confidence index calculated by the ZEW economic institute fell 18.5 points to 8.6 points in August, its lowest level since December 2012.

Investors were also focused on key US retail sales data due to be released later Wednesday, which will shed light on consumer sentiment in the world's top economy.

In currency markets, the dollar fetched 102.28 yen in early Asian trade, compared with 102.24 yen in New York.

The euro bought US$1.3366 and 136.73 yen against US$1.3368 and 136.67 yen.

And on oil markets, US benchmark West Texas Intermediate for September delivery eased 18 cents to US$97.19 while Brent crude for September was down 16 cents to US$102.86 in early Asian trade.

Gold traded at US$1,308.48 an ounce at 0244 GMT compared to US$1,312.30 an ounce late Tuesday.