Shares in Asia were mostly lower Wednesday. A downbeat U.S. productivity report for the second-quarter appeared to be weighing on global stocks.

The U.S. Labor Department released data on Tuesday that showed nonfarm productivity fell 0.5% in the second-quarter. Economists had expected the productivity measure to only fall 0.4% in the quarter. But the latest decline in productivity showed a slight improvement from the previous quarter’s 0.6% pullback.

The weak productivity readout has dampened investor hopes of an accelerated path to interest rate review this year. Investors had their hopes lifted that the Federal Reserve would hike interest rates as early as September after the Labor Department reported more than expected jobs growth in July. U.S. employers added 255,000 jobs in July, building on the 292,000 jobs added in the prior month and outpacing the estimate of 179,000 that economists had for July.

What transpired in the global markets?

Japanese shares pulled back, with the Nikkei 225 (INDEXNIKKEI:NI225) falling 0.18%. Falling shares in Tokyo were led by declining stocks in Finance & Investment, Shipbuilding and Rubber sectors.

A strong yen also diminished foreign interest in Japan equities. USDJPY was down 0.46% and EURJPY declined 0.19%.

In Taiwan, the Taiwan Weighted bucked the trend in the Asian region, rising 0.50% to reach a new one-year high. Taiwan Weighted was led higher by rising stocks in the country’s Trading & Consumer Goods, Hotels and Oil, Gas & Electricity industries.

Stocks in South Korea also gained slightly, with the KOSPI adding 0.04%.

What about China?

Equity trading in China was mixed Wednesday as the larger Shanghai Composite fell 0.23% and the smaller HANG SENG INDEX (INDEXHANGSENG:HSI) in Hong Kong gained 0.12%.

As for what’s driving gains in Hong Kong, “Investors will try to avoid this currency exposure and look for U.S. dollar assets,” Mr. Lau said. “They will look to Hong Kong property as a hedge. The main reason is still big currency movements that lead to demand for Hong Kong, or essentially, U.S. dollar assets,” said Alfred Lau of Bocom International.

Australia

In Australia, a strong Aussie seemed to rattle trading in the country’s stocks as the S&P/ASX 200 declined 0.21%. The index was led lower by falling stocks in Australia’s Telecom Services, Utility and Energy sectors.

AUDUSD advanced 0.27% to 0.7693.

Besides mixed U.S. economic data, falling crude oil prices also weighed on Asian stocks.