The Nikkei 225 in Tokyo tumbled 1.5 percent to 10,713.48 after government minister Akira Amari aired concerns about the recent rapid weakening of the yen, which can hurt consumers by raising the cost of imported goods, Kyodo News Agency reported.
Elsewhere, Hong Kong's Hang Seng fell 0.2 percent to 12,224.38. South Korea's Kopsi rose 0.4 percent to 1,990.78. Australia's S&P/ASX 200 advanced 0.3 percent to 4,732.50.
The Nikkei index finished at 10,879.08 on Tuesday, its highest close in nearly three years, after Bank of Japan Gov. Masaaki Shirakawa pledged to take action to combat the country's deflationary slump.
The yen has slid against the U.S. dollar and euro since the Liberal Democratic Party returned to power in national elections last month. Its leader, Shinzo Abe, has been lobbying the central bank for aggressive action to end Japan's years of deflation and has announced a 20 trillion yen ($225 billion) economic stimulus package.
On Tuesday, Germany's main stock index, the DAX, fell after the government said the economy grew only 0.7 percent in 2012, indicating activity dropped in the last three months of the year by as much as 0.5 percent. The figures show the European financial crisis is weighing down even the strongest economies on the continent.
Analysts at DBS Bank Ltd. in Hong Kong said Germany's shrinking growth was bad news for struggling euro countries since Germany "is the country that is supposed to be the economic engine and banker to Europe all rolled into one."
Still, the U.S. fiscal crisis is the biggest single individual risk facing investors, with 37 percent of investors naming it as the biggest worry, according to a survey of fund managers published by Bank of America Merrill Lynch on Tuesday. The European debt crisis was cited as the biggest concern by 23 percent of those polled and a "hard landing" for the Chinese economy was third on the list with 12 percent.
Also Tuesday, the U.S. Commerce Department said that retail sales rose a better-than-expected 0.5 percent in December from November. That helped boost stocks on Wall Street on Tuesday.
The Dow Jones industrial average rose 0.2 percent to 13,534.89. The Standard & Poor's 500 rose 0.1 percent to 1,472.34. The Nasdaq composite index fell 0.2 percent to 3,110.78.
Benchmark oil for February delivery was up 9 cents to $93.37 per barrel in electronic trading on the New York Mercantile Exchange. The contract dropped 86 cents to finish at $93.28 a barrel in New York on Tuesday.
In currencies, the euro fell to $1.3293 from $1.3299 late Tuesday in New York. The dollar fell to 88.30 yen from 88.83 yen.
(Copyright 2013 by The Associated Press. All Rights Reserved.)