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Hong Kong - Asian markets mostly rose on Wednesday as Britain heads into a high-stakes referendum on its future in the European Union, after the head of the Federal Reserve warned a vote to leave could hammer world markets.
Following a three-day rally fuelled by hopes the country will stay in the economic bloc, analysts said traders were taking a step back to see what happens in Thursday's poll.
While bookmakers say there is an 80% chance the country will stick with the status quo, opinion polls predict a dead heat, with about 10% of voters yet to decide which way to go.
"It would be logical for markets to begin losing momentum and volume while they wait on the outcome of the Brexit vote," Ric Spooner, chief market analyst in Sydney at CMC Markets, said in an e-mail to clients.
"Short-term traders cannot be blind to the risks that despite recent confidence high volatility and short-term illiquidity remain a possibility as the results of the Brexit vote unfold," he said, according to Bloomberg News.
Tokyo's Nikkei pared a morning sell-off to end 0.6% lower while Hong Kong was up 0.6% and Sydney shed 0.1%.
Shanghai rose 0.9% and Seoul gained 0.5% by the close, while Singapore added 0.7% in late trade.
In early European trade London rose 0.5%, while Paris and Frankfurt each gained 0.7%.
The pound, which has rallied this week with hopes for a vote to remain, was up at $1.4660 from $1.4628 in New York, where it touched a five-month high of $1.4783 at one point.
Pound pushes up
However, Joseph Capurso, a senior currency strategist in Sydney at Commonwealth Bank of Australia, said: "The way the pound is trading it looks like the vote is a foregone conclusion for 'Remain'.
"The polls are still too close to call in our view. If the vote is for exit, the pound is set up for a large fall."
European Commission President Jean-Claude Juncker said a British exit would be "an act of self-harm" that would endanger everything Europeans had worked together to achieve.
European Central Bank chief Mario Draghi said it was preparing for "all possible contingencies".
Fed boss Janet Yellen also warned of the dangers of an out vote, saying it would likely send shock waves through already fragile global markets, which are struggling to recover from the January-February China-fuelled rout.
Appearing before a congressional panel, she said Britain leaving the EU would have "significant economic repercussions" and could rupture what she called "a very important relationship" between Britain and the European continent.
Away from the EU vote, she also said US growth had picked up noticeably in the second quarter after a weak start to the year but added it had been uneven and clear downside risks remained.
