Still, the index snapped eight straight sessions of losses and closed above it's 200-day simple moving average of 5,104 points for the first time in four sessions.
Banks lent support with Australia New Zealand Banking and National Australia Bank both 0.6 higher while miners gained on higher copper prices. Fortescue Metals rallied 3 percent and Rio Tinto added 1 percent.
Meanwhile, minutes from the Reserve Bank of Australia's December policy meeting showed the central bank maintained its easing bias and reiterated that the Australian dollar remains uncomfortably high, even as it trades near three-and-a-half month lows around $0.89 U.S. cents.
(Read more: Has the tide turned for corporate Australia?)
Kospi up 0.2%
South Korean shares recovered after closing at their lowest level in over three months on Monday despite data showing that producer prices fell at their slowest annual rate in a year in November.
Telecom stocks led the gains. KT jumped 1.5 percent after nominating former Samsung president Hwang Chang-Gyu as chairman while SK Telecom rallied 3 percent.
(Watch: Why Mark Mobius isn't concerned about EMs)
Steel maker POSCO closed down 0.3 percent after appealing to a panel headed by Indian prime minister Manmohan Singh to speed up clearance for its long-delayed India steel project.
Emerging markets higher
Southeast Asian markets tracked Asia-wide gains. Philippine's benchmark index closed 2 percent higher and Indonesia's Jakarta Composite jumped 1.37 percent. Indian stocks closed the session lower by 0.2 percent after initially trading higher.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC