Sydney falls 0.2%
Australia's benchmark S&P ASX 200 index fell after data showed consumer prices rose more-than-expected in the December quarter, reducing the chances of an interest rate cut from the Reserve Bank of Australia. In reaction, the Australian dollar rose to $0.8873 against the greenback, retreating further from Monday's three-and-a-half year low.
"This is clearly a disappointing outcome and substantially reduces the possibility of another rate cut from the RBA. However, while the increase in inflation will concern the RBA, it's not bad enough to bring on an imminent rate hike either as the annual inflation rate is still in line with the RBA's target," said Shane Oliver, head of investment strategy and chief economist at AMP Capital.
(Read more: Australia's inflation spike creates dilemma for RBA)
BHP Billiton crept down 0.8 percent, tracking declines in its U.S. listed ADRs, despite reporting a 16 percent rise in iron ore output for the three months through December.
Gold miner Medusa Mining lost 5.6 percent following a 10 percent plunge in early trade after ceasing all mining activities in its Philippines gold mine due to flooding.
Kospi gains 0.3%
South Korean exporter stocks rose as the won hit a two-week low; a weaker currency boosts their competitive advantage in overseas markets. Kia Motors led gains by over 3 percent.
Risk appetite was also bolstered by news that the government unveiled a three-year plan focused on economic innovation and aimed at wooing foreign investors.
Emerging markets lower
Thailand's benchmark SET index extended losses after dropping 1 percent in the previous session while the baht was steady around 32.86 per dollar.
Indian shares meanwhile, were flat after a central bank panel recommended inflation as the Reserve Bank of India's main objective, rather than economic growth.
— By CNBC's Nyshka Chandran. Follow her on Twitter: