Thailand's SET Index reversed losses to move off a two-and-a-half month low while the baht hovered at an eleven-week low against the dollar ahead of Prime Minister Yingluck Shinawatra's no-confidence debate in parliament. The city of Bangkok has been rocked with anti-government protests in a growing bid to oust Shinawatra.
"Markets are only pricing in uncertainty about how mounting pressures on Yingluck to step down will play out. Whereas, there appears to be underlying confidence that the economy will not be rendered dysfunctional due to politics. The latter scenario will extract a much greater toll on Thai markets," said Vishnu Varathan, senior economist at Mizuho Corporate Bank.
Other emerging markets were broadly lower with Indonesia's Jakarta Composite down as much as 2.3 percent and Indian shares declining 0.9 percent.
Indonesian shares drop
Indonesian shares dropped due to a U.S. dollar-denominated bond auction which failed, with the government selling a little less than $300 million worth of bonds when it was aiming to sell $450 million, said Tim Condon, head of Asia research at ING.
He added, investors are also "unnerved" by Bank Indonesia's comments that it isn't concerned about the rupiah weakening.
Nikkei 0.7% lower
A pause in the yen's decline gave investors a chance to book profits on the benchmark Nikkei, leading it to snap a three-day winning streak. Dollar-yen came off the previous day's six-month high of 101.91 in Asian trade.
On Monday, the index rallied to its third consecutive six-month high and has been trading 5.5 percent above its 25-day moving average of 14,681, which indicates signs of overheating.
Among the most actively traded stocks, Toyota Motor fell over 1 percent while department store Takashimaya tumbled nearly 4 percent after announcing it will issue around $638 billion in convertible bonds.
Minutes from the Bank of Japan's October meeting showed some members saw downside risks to economy, underscoring pessimism within the board on achieving its 2 percent inflation target.