Japanese shares turned positive on Tuesday after damage from an earthquake appeared moderate, while most other Asian markets rallied as the dollar retreated.
Shares also benefited from a weaker yen, which traded at 111.03 at 2:55 p.m. HK/SIN, after previously strengthening to a session high of 110.23 against the dollar following the news of the earthquake.
In Tuesday's early hours, a magnitude 6.9 quake struck off the coast of Fukushima prefecture, and Japan's public broadcaster NHK reported a 60 cm (2 foot) tsunami had been observed at Fukushima's Onahama Port and a 90 cm (3 foot) tsunami was seen at Soma soon after the quake. A tsunami warning for waves of up to 3 meters (10 feet) was issued after Tuesday's quake, but was later lifted.
Investors were also concerned after President-elect Donald Trump's latest statement that he would withdraw the U.S. from the Trans Pacific Partnership (TPP) agreement on the first day of his term. Reuters said Japan's Prime Minister Shinzo Abe told reporters in Buenos Aires, Argentina, the trade deal would be meaningless without U.S. involvement.
Analysts said the expected damage from quake was unlikely to be severe and would not have a big impact on markets.
Takuji Okubo, principal and chief economist at Japan Macro Advisors, told CNBC's "The Rundown" on Tuesday "I don't think we should be much worried about that. But then these events do reinforce the idea that there are issues with having nuclear power in Japan. So there could be another rise in the sentiment against nuclear power."
Abe pushed for the restart of nuclear plants in the country, following their shutdown in the wake of the 2011 disaster, but anti-nuclear sentiment remains strong.