Asia stocks lost momentum Tuesday with major indexes slipping as an overnight improvement in market sentiment ran out of steam.
Japan's benchmark , which was up over 1 percent in early trade, gave up all of its gains to close down 59 points,or 0.37 percent, at 16,052.05. The broader Topix index also erased gains to finish lower by 8.83 points, or 0.68 percent, to 1,291.17.
The Japanese yen remained strong against the dollar, with the dollar-yen pair remaining around the 112-handle at 112.44 as of 1.35 p.m. HK/SIN time.
Across the Korean Strait, the Kospi shed 2.14 points, or 0.11 percent, to 1,914.22. Down Under, the S&P/ASX 200 closed down 21.63 points, or 0.43 percent, at 4,979.58, weighed by losses in the heavily weighted financials sector and the energy sector, down 0.7 and 0.47 percent respectively.
Chinese markets also lost ground with the main index closing down 23.22 points, or 0.79 percent, at 2,903.95. The smaller Shenzhen composite fell 11 points, or 0.58 percent, to 1,877.18.
Bill Maldonado, chief investment officer for Asia Pacific at HSBC Global Asset Management, told CNBC's "Squawk Box" that while the turnaround in equities in recent weeks made sense fundamentally, the question remains if it will last.
He added valuations, especially in Asia, had got to some "really crazy levels."
"[It was] kind of same valuation you had back during SARS or the Asian financial crisis of the late 90s or even the global financial crisis. Yet companies are doing okay...it's not great, it's not booming but things are generally okay," he added. "I think it got really, really overdone, so good to see it stabilizing a bit over here."
In Asian trade, U.S. crude futures for April delivery were down 1.59 percent at $32.87 a barrel as of 3.10 p.m. HK/SIN time. But overnight, oil prices rose again; U.S. crude futures for March delivery, which expired Monday after the close, settled up 6.21 percent.
Global benchmark Brent also fell 1.47 percent to $34.18 a barrel, after gaining 5.3 percent in overnight trade.
Energy plays across Asia gave up much of their early gains and traded mixed, with Santos closing down 1.18 percent, Woodside Petroleum lower by 0.11 percent, Japan's Fuji Oil falling 1.54 percent and Inpex adding 0.9 percent.
Energy plays on the Chinese mainland were mostly lower, with China Oilfield dropping 1.2 percent.
Andres Jaime Martinez of Barclays said in a morning note that the oil prices rebound overnight was "partially explained by the recent talks about an output freeze, but the price action looked more like a short squeeze in a nervous market."
OPEC's secretary general Abdalla Salem El-Badri said on Monday both OPEC and non-cartel countries are willing to cooperate to find a solution to low oil prices.
In recent weeks, major oil producers, including Saudi Arabia and Russia, met in Doha and have said they are ready to freeze production at January levels if other producers do the same.
Iran, which returned to the international oil market after U.S.-led sanctions on the Persian state were lifted earlier this year, welcomed the deal. But it stopped short of saying it would itself freeze production at January levels. Instead, Iran's deputy oil minister said Saturday the country will increase production soon.
In Japan, Takata shares retraced some losses to close down 4.34 percent. Earlier, shares fell as much as 8.28 percent after Reuters reported U.S. regulators are examining if another 70 million to 90 million air bag inflators need to be recalled.
The airbag manufacturer has been embroiled in a long controversy over faulty airbags, leading to many major car manufacturers issuing recalls globally.
Down Under, miners were in focus after one of the world's biggest miners slashed its dividend for the first time since 1988 in the wake of the collapse in commodities prices.
BHP Billiton reported a net loss of $5.67 billion for the first half of the 2016 financial year and cut its interim dividend by 75 percent to 16 cents, from 62 cents a share, well below analyst expectations of 31 cents.
The Big Australian has long been valued by investors for its reliable and rising dividend payments, but after rivals Rio Tinto and Glencore slashed their dividends, the markets had been expecting BHP to do the same.
Rob Brierley, head of research at Patersons Securities, told CNBC's "The Rundown" that BHP had finally admitted the slump in commodities would last longer than the short term.
"They've made some interesting measures, probably in my view a bit too late," he said. "I think the market's going to like the fact that there's clarity on the dividend and also the reduced capex forecast going forward."
Despite the steep decline in its earnings numbers, BHP shares closed up 2.62 percent. Other miners were mixed, with Rio Tinto adding 1.43 percent, while Fortescue gave up early gains to close down 3.23 percent.
Shares of commodities trader Noble Group erased losses of as much as 4.05 percent to trade up 2.70 percent despite warning it will post a net loss in the fourth quarter and for the full-year 2015, after taking a $1.2 billion hit from adjustments as commodities prices continued to tank.
In Europe, hit a seven-year low on Monday on rising concerns that Britain could leave the European Union, with a referendum set to be held on June 23.
Overnight, Wall Street ended higher, with the closing up 228.67 points, or 1.40 percent, at 16,620.66. The S&P 500 was up 27.72 points, or 1.45 percent, at 1,945.50 and the was up 66.18 points, or 1.47 percent, at 4,570.61.