Chinese shares outperformed on Monday as investors cheered the latest market reforms while geopolitical tensions weighed on the rest of region.
In the eastern Ukrainian city of Donetsk, election officials said 89 percent voted to leave the country in favor of self-rule during a referendum on Sunday. It remains unclear whether those votes refer to independence or an eventual union with Russia.
Trouble in Thailand and Vietnam were also in focus. In Bangkok, the government urged supporters to stay away from protest sites on Monday as the Senate holds a special session to discuss the ongoing political crisis. Meanwhile, hundreds rallied in Vietnam on Sunday against the set up of a Chinese oil rig in the South China Sea.
Shanghai rallies 2%
Mainland shares closed at their highest levels in over two weeks after the State Council unveiled a blueprint of capital market reforms on Friday, including direct bond issuances for local governments and the removal of some restrictions on financial derivatives.
That overshadowed fears of a glut of new initial public offerings (IPOs) after Beijing unveiled new rules over the weekend that may be designed to keep more IPOs at home.
Commodity stocks led the gains with Yangquan Coal and Lu'An Environmental Energy rallying by the daily trading limit of 10 percent while Jiangxi Copper jumped 6.8 percent.
Banks and brokerages also rallied; Citic Securities ended 4 percent higher and Founder Securities rose over 3 percent.
Nikkei slips 0.3%
Japan's benchmark index ended lower after a volatile session, snapping its two-day winning streak. Sentiment was dampened after data released before the market open showed the economy recorded a smaller-than-expected trade surplus in March.
Camera maker Olympus jumped 4.8 percent after reporting a near 70 percent increase in profits for the last fiscal year.
Financials were in focus after data showed that bank loans in April rose more than 2 percent from a year ago. Mitsubishi UFJ and Sumitomo Mitsui Financial ended 0.3 percent higher following a 1 percent rally earlier in the session.
ASX slips 0.2%
Australian shares were dragged down by miners while caution also set in ahead of Tuesday's federal budget.
Fertilizer firm Incitec Pivot added 1 percent after reporting a 7 percent rise in first-half net profit.
Kospi gains 0.4%
South Korean shares reversed earlier losses to rise for a third straight session thanks to a 4 percent gain in index heavyweight Samsung Electronics. Investors welcomed news that chairman Lee Kun-hee had recovered after suffering a heart attack over the weekend.
Retailer Lotte Shopping dropped 4 percent after reporting a 7.8 percent annual slide in first-quarter operating profit.
Emerging markets mixed
Indian shares rallied 2.4 percent to a fresh record high on expectations that the country's main opposition party will win the general election; final results are due this Friday.
Vietnamese shares lost 5 percent to hit a four-month low on mounting tensions with China.