By Charlotte Cooper

TOKYO, JAPAN - Asian stock markets put in a mixed performance on Wednesday, with Seoul and Shanghai gaining but Tokyo and Sydney weak as data showed the process of swinging the global economy around to a recovery would be a slow grind.

Oil held above US$70 a barrel after U.S. industry inventory data showed a bigger-than-expected fall in crude stocks, which pared some of the previous day's losses after data had unsettled investors about a potential U.S. economic rebound.

In Japan, business confidence pulled back from a record low hit three months ago, but the improvement was smaller than market expectations and still a negative reading.

That followed an unexpectedly steep slide in U.S. consumer confidence in June, which dented optimism on Wall Street about prospects for recovery and weighed on shares in Asia.

But news of a smaller-than-expected drop in South Korea's exports lifted shares in Seoul 1.6 percent, and factory surveys in China showed a steady recovery in June, boosting Shanghaistocks by 1.7 percent.

Taiwan's TAIEX index rose 2.3 percent as property shares surged after the island said it would allow Chinese investors to apply for mortgages.

Indian and Singapore shares also rose, while Hong Kong was closed for a holiday marking the anniversary of the territory's handover to China from Britain.

The MSCI index of Asia-Pacific shares excluding Japan was almost flat, coming off its strongest quarter since the final three months of 1993.

Back then and similar to current conditions, low interest rates in the United States and China's economic emergence drove investors head first into the high-growth "tiger" economies in Asia.

Tokyo's Nikkei share average fluctuated heavily before closing 0.2 percent in the red.

Currencies too struggled for direction as rallies in commodity related and riskier currencies paused.

"There's no consensus in the market right now between optimism and pessimism, as it's in the midst of recovery trade after extreme moves," said Minoru Shioiri, chief manager of forex trading at Mitsubishi UFJ Securities.

"Perhaps you can say the market has been leaning toward risk-taking, but it still needs to affirm that a recovery in
the real economy is keeping pace with expectations."

In Japan, Orix Corp and All Nippon Airways slid on news of planned public share offerings.

But construction stocks such as Komatsu gained, helped by the manufacturing surveys data from China.

Brokerage CLSA's China Purchasing Managers' Index rose in June to an 11-month high of 51.8 and China's official purchasing managers' index (PMI) for June also showed China's economic recovery is on more solid ground.

Nonetheless, Australia saw a weak start to the new quarter.

The benchmark index fell 2.1 percent as miners such as BHP Billiton shed 2 percent and growth-sensitive stocks such as mall owner Westfield Group lost ground.

MIXED BAG

Japan's business confidence figures came after the U.S.Conference Board's index of consumer attitudes fell in June to 49.3 from 54.8 in May, deflating U.S. stocks on the last day of the quarter.

The Dow Jones industrial average slipped a percent, the S&P 500 dropped 0.85 percent and the Nasdaq eased half a percent.

Still, Wall Street closed out its best quarter in a decade.

Markets are likely to be subdued as they await key U.S. jobs data on Thursday which help put another piece in the puzzle about how fast the world's largest economy is mending.

Speaking ahead of that and a raft of U.S. data later on Wednesday, San Francisco Federal Reserve President Janet Yellen said the Fed's key interest rates could stay near zero for a couple of years.

The dollar index initially gained but later dropped back to stand steady on the day and the yen recouped ground lost to outflows from Japanese pension and mutual funds, traders said.

The dollar climbed 0.3 percent to 96.65 yen, after touching its highest in nearly two weeks.

U.S. Treasury prices edged higher while the two-year Japanese government bond yield hit its lowest in three years as expectations grew the central bank would extend measures to ease corporate credit strains beyond a September deadline.

Gold edged higher, taking a breather after falling more than 1 percent the previous day when a stronger dollar prompted broad-based selling across the commodities sector. --REUTERS