Tokyo – Asian shares unwound early gains on Wednesday, as investors turned cautious following renewed selling in recently battered crude oil futures.

MSCI’s broadest index of Asia-Pacific shares outside Japan erased a positive start to edge down 0.1 percent, on track for a flat monthly performance and down 12 percent for the year.

U.S. crude futures skidded 1.8 percent to $37.19 a barrel, while Brent shed 1.2 percent to $37.32. Both had jumped 3 percent overnight, taking back ground lost in the previous session as colder weather forecasts raised expectations of more demand.

But weekly data from industry group the American Petroleum Institute (API) showed a rise of almost 3 million barrels in U.S. crude inventories, defying expectations of no change and rekindling fears of a supply glut.

On Wall Street, major US indexes each gained more than 1 percent. All 10 major S&P sectors ended with gains, led by a 1.34 percent rise in the technology sector, which lifted the S&P 500 to a modest increase for the year.

Japan’s Nikkei was up 0.3 percent, off session highs but still poised to gain over 9 percent for the year, though down more than 3 percent for December.

“We’re seeing thin volumes at year-end as the number of active participants has decreased due to the holidays,” said Martin King, co-managing director at Tyton Capital Advisors.

Australian shares outperformed, up 0.9 percent and on track for their ninth consecutive day of gains.

Higher US Treasury yields underpinned the dollar overnight, although yields were off highs in Asia.

The yield on benchmark 10-year U.S. Treasury notes stood at 2.292 percent, compared with its U.S. close of 2.307 percent on Tuesday.

The yield on the U.S. two-year note closed at 1.095 percent on Tuesday after earlier touching its highest level since April 2010.

The dollar index, which tracks the greenback against a basket of six rival currencies, was up 0.1 percent at 98.207.

The index rose to nearly a one-week high of 98.413 on Tuesday, from a nearly two-week low earlier in the session. It is up 8.8 percent for the year, though down nearly 2 percent for the month as investors pare their dollar-long positions after the US Federal Reserve’s widely anticipated interest rate increase earlier in December.

The dollar was steady at 120.47 yen, while the euro edged up 0.1 percent to $1.0928.

The Australian dollar, meanwhile, slipped about 0.2 percent to $0.7280 as the renewed selling in crude prices prompted investors to lock it gains on its rise to $0.7303 overnight, its highest since December 10.

The New Zealand dollar was down 0.3 percent at $0.6855 , after it scaled a 10-week peak of $0.6881 in the previous session.

Spot gold edged up about 0.2 percent to $1 070.61 an ounce, but remained poised to drop more than 9 percent for 2015 to log its third year of losses.

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