Gains in Asia came after the Fed's Powell gave a positive assessment of the U.S. economy during his semi-annual congressional testimony on Tuesday, indicating that gradual interest rate increases were warranted.
Powell also touched on the matter of trade disputes between the U.S. and its trading partners, saying it was "difficult to predict" the implications of those on the economy.
"So the key take away is that trade policy has not yet affected the Fed’s intentions for further gradual hikes. The Fed remains data dependent and the inclusion of the phrase 'for now' provides the bank with some flexibility if it needs to alter the interest rate path ahead," Rodrigo Catril, senior FX strategist at National Australia Bank, wrote in a note.
The dollar extended overnight gains made following Powell's comments, with the dollar index, which tracks the greenback against a basket of currencies, mostly steady at 95.241. Against the yen, the dollar traded at 113.06 at 2:42 p.m. HK/SIN, after touching a six-month high earlier in the day.
"[W]e note that Powell merely repeated the base case, and presented no new information that may be construed as a broad USD driver going forward. Gains in the USD post-Powell may be due to the re-establishment of USD longs pared in the run-up to testimony," Terence Wu, a strategist at OCBC Bank, pointed out in a note.
U.S. stocks rose as earnings season rolled on stateside. The tech-heavy Nasdaq composite notched a record high on Tuesday before closing up 0.63 percent to 7,855.12 and outperforming other U.S. indexes. Netflix shares closed down by more than 5 percent after missing subscriber growth projections while shares of Amazon touched an all-time high on a report that reflected robust Prime Day sales.
Meanwhile, oil prices were slightly softer after U.S. crude inventories grew last week, rather than declined as expected, according to the American Petroleum Institute. U.S. crude futures declined 0.76 percent to trade at $67.56 per barrel and Brent crude futures edged down by 0.71 percent to $71.65.
In individual stocks, shares of Air China fell 3.12 percent in Shanghai. The decline came after the airline had its flight hours reduced by regulators after an emergency incident, linked to a co-pilot smoking while on board an airplane, occurred last week, Reuters said, citing local state broadcaster China Central Television.
Meanwhile, Xiaomi advanced 4.31 percent by 3:09 p.m. HK/SIN after the Hong Kong stock exchange said it had come to an agreement with mainland bourses to work on potentially allowing companies with weighted voting rights to be traded through the various connect programs.