The dollar marked a fresh seven-year high against the yen on Wednesday, which helped lift the Nikkei to a similar record, while oil prices recovered after data showed a drop in U.S. supply.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged slightly down, while Japan's Nikkei stock average was up about 0.8 percent after earlier touching its highest level since July 2007.

A pair of surveys showed that China's services sector grew slightly faster in November, though they did not vanquish fears about a softening Chinese economy.

"Downside pressures on the economy still persist," said Qu Hongbin, an economist at HSBC in Hong Kong, adding that he expected further policy easing in coming weeks.

Wall Street posted solid gains on Tuesday, with the Dow Jones industrial average .DJI closing at a record high, boosted by gains in energy shares as investors searched for bargains in the sector.

U.S. crude CLc1 rose more than 1 percent to $67.67 a barrel in Asian trade, after industry group American Petroleum Institute (API) released data showing U.S. crude stocks fell 6.5 million barrels last week.

Brent crude LCOc1 added 0.9 percent to $71.16. Brent and U.S. crude are down more than 30 percent since June and touched five-year lows on Monday in recently volatile trade amid massive oversupply.

"The market's volatility is a result of people working out what's going to happen next," said Jonathan Barratt, chief investment officer at Ayers Alliance Securities.

Saudi Arabia would only consider cutting production if other countries, including non-OPEC producer Russia, joined in limits, former Saudi intelligence chief Prince Turki bin Faisal said on Tuesday.

While economists fear the sharp drop in global energy prices could fan deflationary pressures in some countries, both New York Fed President William Dudley and Vice Chair Stanley Fischer this week painted a mostly rosy outlook for the U.S. economy and welcomed the cheaper oil.

"Both were relatively optimistic on the U.S. economy and went out of their way to stress upside benefits to the U.S. economy of weaker oil prices," Steven Englander, global head of G10 foreign exchange strategy at CitiFX, said in a note.

"All of this is extremely positive for USD, given that fed funds has priced in an extremely flat policy hike path and the USD looks extremely sensitive to interest rate differentials in the current environment," he added.

Rising Treasury yields added to the appeal of the U.S. dollar on Wednesday. The benchmark 10-year Treasury yield US10YT=RR ticked up to 2.287 percent in Asian trade, up from its U.S. close of 2.285 percent.

The greenback pushed about 0.1 percent higher to 119.37 yen JPY=, after earlier rising as high as 119.44 on the EBS trading platform, its strongest level since August 2007.

The euro was flat on the day at $1.2385 EUR=.

The Australian dollar, already under pressure from sagging oil prices, tumbled to four-year lows on Wednesday after surprisingly weak growth data prompted markets to raise the chance of an interest rate cut next year.

Australian gross domestic product rose by 0.3 percent in the third quarter, less than half what analysts expected and the slowest since early 2013.

That helped push the Aussie AUD=D4 as low as $0.8388, its weakest since mid-2010, It was last down 0.6 percent at $0.8391.

The U.S. dollar's recent strength has weighed on spot gold XAU= which dipped 0.1 percent to $1,199.90 an ounce on Wednesday.