(fxcue news) - Asian stocks ended mixed on Wednesday and the U.S. dollar index surpassed 104 mark, tracking elevated U.S. treasury yields amid easing expectations of aggressive Federal Reserve rate cuts and fears the U.S. may be heading toward fiscal collapse. Gold reached a new record high while oil prices fell after industry data showed U.S. crude inventories swelled more than expected. Chinese shares eked out modest gains after reports emerged that the government may deploy as much as 2 trillion yuan (US$280 billion) to establish a stock market stabilization fund. The benchmark Shanghai Composite index rose 0.52 percent to 3,302.80 while Hong Kong's Hang Seng index rallied 1.27 percent to 20,760.15. Japanese markets lost ground as investors were reluctant to place major bets ahead of the country's upcoming lower house election. Sentiment was also dented by rising Treasury yields due to shifting expectations around how fast and deep the Federal Reserve will cut rates. The Nikkei average fell 0.80 percent to 38,104.86 after media polls suggested that the ruling Liberal Democratic Party (LDP) and its coalition partner Komeito may lose their majority in the election. The broader Topix index settled 0.55 percent lower at 2,636.96. Staffing agency Recruit Holdings slumped 4.9 percent and Uniqlo-owner Fast Retailing dropped 1.7 percent while automakers Honda Motor and Toyota surged 2-3 percent on the back of a weaker yen. Tokyo Metro shares jumped 45 percent on the first day of trading for the company. Seoul stocks rose sharply, with automakers and technology stocks leading the rally. The Kospi average jumped 1.12 percent to 2,599.62. Market bellwether Samsung Electronics jumped 2.4 percent while No. 2 chipmaker SK Hynix surged 4.4 percent. Top carmaker Hyundai Motor gained 2.8 percent. Australian markets finished marginally higher, led by consumer staple stocks. The benchmark S&P/ASX 200 edged up 0.13 percent to 8,216 while the broader All Ordinaries index ended marginally up at 8,476.30. Supermarket operator Woolworths advanced 1.6 percent and Coles Group added 1.4 percent as their lawyers began defending allegations of dodgy discount behaviour in the Federal Court. Across the Tasman, New Zealand's benchmark S&P/NZX-50 index dropped 0.20 percent to 12,787.60. U.S. stocks ended narrowly mixed overnight as Treasury yields continued to climb on prospects for a slower pace of Federal Reserve rate cuts and amid concerns about the possible fiscal impact of U.S. presidential election results. The Dow and the S&P 500 finished marginally lower while the tech-heavy Nasdaq Composite edged up 0.2 percent.