Investors are looking ahead to Fed Reserve Chairman Ben Bernanke's semi-annual testimony to Congress on Wednesday, from which they hope to garner further clues on the timing of when monetary stimulus is likely to be unwound.
(Read more: Pimco's El-Erian: Where does the Fed get its numbers?)
"The market will also be very keen to hear if the chairman's views on the economy have changed, with many feeling the Fed's outlook is wildly optimistic, especially with the Q2 run rate around 0.8 percent, after a patch of softer data," wrote Chris Weston, market strategist at IG in a note.
Nikkei ends in the green
Tokyo equities reversed earlier losses in afternoon trade as dollar-yen crept closer to the 100-yen level. The Nikkei closed just 23 points shy of a new eight-week high.
Manufactures led the gains. Automaker Mitsubishi Motor jumped 11 percent and steel producer Kobe Steel jumped 4 percent. Shares of electronics firm NEC rose 5 percent after the Nikkei newspaper reported that the company would exit its loss-making smartphone business.
(Read more: Fate of yen hinges on Japan's weekend elections)
Investors hoping to see hints of of future stimulus in minutes of the Bank of Japan's (BOJ) latest policy meeting were disappointed. The minutes revealed that members discussed steps to calm recent turbulence in the bond market but decided against them, stating that the BOJ's current operations would be enough to stabilize rates.
Shanghai down 1%
China's benchmark stock index fell in volatile trade for the first time in three days despite upbeat economic data. Foreign direct investment (FDI) in June surged over 20 percent from a year ago, a huge step up from May's 0.3 percent annual gain.
(Read more: Yuan as global currency? Many firms still don't see benefits)
Property developers declined ahead of Thursday's release of home price data. Gemdale fell 1.5 percent while Vanke slipped 0.6 percent.