Japanese equities pared gains in late afternoon trade to fall below 14,440 points, moving away from a seven-week high hit earlier in the session.
The yen weakened to a seven-week low against the greenback at the 100.60 level and that lifted industrial stocks. Battery maker GS Yuasa outperformed to rally 8 percent while automakers Mitsubishi Motors and Isuzo Motors rose 4 and 5.3 percent, respectively.
(Read more: Doubts over plan to raise Japan sales tax linger)
Sentiment also rose after Prime Minister Shinzo Abe on Tuesday called on his cabinet to put together a new economic package by the end of this month. Analysts say the move suggests Abe will go ahead with plans to hike the sales tax from April and will use the new package to soften the blow to the economy.
Shanghai up 0.1%
China's benchmark stock index tracked Asia-wide gains to rise above 2,240 points hitting a new three-month high.
China State Shipbuilding rallied 10 percent after saying it plans to raise over $1 billion through a private share sale in order to build warships, the first time Beijing has tapped capital markets to fund its military expansion. The news prompted a rally in the sector with China Shipping Container Lines also up 10 percent.
But financials weighed on the index with Bank of China and Agricultural Bank of China down 1 percent each even after data from the central bank showed new bank loans topped forecasts in August.
(Read more: Corporates take emerging market volatility in stride)
"We believe it's extremely unlikely for China to have another interbank liquidity crunch in the near future. Interbank rates may inch up towards late September, but most likely the PBOC will do whatever it can to prevent a possible liquidity squeeze," said analysts at Bank of America Merrill Lynch in a note.
India closes flat
Bombay's Sensex index fell below the 2,012 mark, retreating from a seven-week high even as the rupee rose for a fifth straight session. The index closed flat.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC