Asian shares outside Japan declined on Tuesday, as investors eyed a slew of corporate earnings due in the region and a two-day meeting by the Federal Reserve on clues of when interest rates in the U.S. could be lifted.
Wall Street underpinned the subdued mood by ending down overnight, failing to hold Friday's records. The tech-heavy led losses, down 0.6 percent as biotech stocks lagged. The shed 0.2 percent, while the S&P 500 index dropped 0.4 percent.
Nikkei gains 0.4%
Japan's benchmark Nikkei 225 hurled itself back over the psychologically-important 20,000 mark early Monday, overlooking a larger-than-anticipated fall in retail sales, which slumped 9.7 percent on-year in March. This compared with a drop of 1.8 percent in the preceding month.
Heavyweight components provided the bourse with positive support; industrial robot maker Fanuc, which doubled its dividend payout to 60 percent, soared 3.3 percent to record highs, while Fast Retailing scaled up 1.8 percent.
Earnings season remain underway; Komatsu tumbled 3 percent on the back of an announcement saying that the company expects an 8.7 percent fall in operating profit for this fiscal year through March 2016. Honda Motor trimmed gains to finish 0.3 percent higher ahead of quarterly earnings due for release after the market close.
Meanwhile, a merger between U.S.-based Applied Materials and Tokyo Electron to create one of the world's largest chip-making equipment fell apart due to opposition from U.S. anti-trust regulators. Shares of the latter plummeted 14.8 percent on the news.
Read MoreJapan earnings: No slowdown here
Mainland markets down
After witnessing choppy trade in the morning session, the Shanghai Composite crept deeper into the red to eventually close down 1.1 percent, well off Monday's seven-year peak.
Hong Kong's Hang Seng Index also reversed a higher open to finish the day little changed. The Hong Kong bourse had rose to its highest level since December 2007 in the previous session.
Sinopec jumped 1.4 percent while PetroChina failed to capitalize on Monday's upward momentum, closing down 2.2 percent in Shanghai, after downplaying media reports that their parent companies would be merging. Shares of both firms sold-off in Hong Kong, down over 4 percent each.
Meanwhile, Bank of Communications bounced up 1.9 percent, while China Merchants Bank sagged 0.4 percent ahead of its first-quarter earnings release today.
While the breakneck rally in China as of late have spurred concerns, there are experts who believe the market movements are well-supported.
"There is an element of the 'Greater fool theory' in China, but there is also something fundamental going on. China is in the early stages of liquefying its economy, in both fiscal and monetary perspectives," Viktor Shvets, head of Strategy Research for Asia at Macquarie, told CNBC.
"China has one of the highest real interest rates, but this is going to zero. China is also capable of fiscal stimulus that other countries can't so all the improvements in the equity market can be supported not necessarily by economics, but by much more aggressive monetary and fiscal policy," he added.
Taiwan sheds 0.2%
Taiwan equities took a breather on Tuesday after charging up to 15-year highs and touching the 10,000-point milestone in the previous session.
Suppliers of Apple were in focus after the iPhone maker reported quarterly earnings and revenues that beat market expectations; the bourse's heaviest-weighted stock Taiwan Semiconductor Manufacturing (TSMC) finished unchanged, while Hon Hai Precision Industry and Catcher Technology eased more than 1 percent, respectively.
Fortunately, financials helped to offset declines by extending Monday's rally; Cathay Financial and Fubon Financial Holding notched up 0.9 and 2.8 percent each.
Kospi drops 0.5%
South Korean shares slipped further into negative terrain as investors took a wait-and-see approach on the two-day Federal Open Market Committee (FOMC) meeting that kicks off today, analysts said.
Automakers were among the most heavily sold-off; Hyundai Motor and Kia Motors closed down 2 and 3.5 percent, respectively.
Shipbuilders helped to offset some declines; Hyundai Heavy Industries, the world's largest shipbuilder, shot up nearly 5 percent. Samsung Heavy Industries, which is in the spotlight after announcing early Tuesday that the company is not seeking a merger with Samsung Engineering, closed up 1 percent.
However, shares of Samsung Engineering reversed a higher open to tank 3.3 percent.
ASX falls 0.6%
Australia's S&P ASX 200 index retreated from Monday's seven-year closing highs to finish further away from the elusive 6,000 mark, which it has not hit in more than 7 years.
Reserve Bank of Australia governor Glenn Stevens gave a speech early Tuesday, but said he would not comment on whether the central bank would be cutting rates as the next policy meeting is only a week away. As such, banking shares struggled. Westpac led losses with a plunge of 1.2 percent, while Australia and New Zealand Banking eased 0.5 percent.
However, gold producers managed to buck the overall downtrend, thanks to the sharp overnight gains in spot gold. Evolution Mining and Newcrest Mining settled up 5.1 and 3.6 percent each, while Alacer Gold advanced 2.4 percent.
Another outperformer for the day is Metals X, which scaled 6.7 percent to hit its highest level since November 2011, after investment firm Canaccord Genuity upgraded the company's rating to "buy" from "hold" and raised its price target to A$1.75 from A$1.45 on Monday.