Central banks were top of mind for investors, with the Bank of Japan keeping policy steady, as was widely expected, but making its policy framework more flexible for the long-term yield target. The BOJ maintained its target for the 10-year government bond yield at around zero percent.
The slight adjustment was seen as somewhat of a letdown after earlier reports that the central bank could modify policy to make its program more sustainable.
The central bank's quarterly report "left little doubt about the policy bias, noting 'risks to the price outlook are skewed to the downside,' 'more time will be needed' to hit 2 percent and the risk of destabilizing the financial system from a continued low rate environment 'are not significant for now,'" said Sue Trinh, head of Asia FX strategy at RBC Capital Markets.
While the stronger yen and higher Japan government bond yields ahead of Tuesday had led to speculation about tweaks to yield curve control, "[i]n the end, the BOJ may be simply seeking more flexibility in achieving its inflation goal rather than abandoning its commitment to monetary stimulus," Philip Wee, FX strategist at DBS Bank, said in a note published before the central bank's decision was announced.
The yen saw volatile trade following the announcement, rising to trade as high as 111.44 to the dollar — around a one-week high — compared to levels as low as 110.76 seen earlier. The yen traded at 111.23 to the dollar at 2:56 p.m. HK/SIN.
The mixed session in Asia also came after U.S. stocks declined on the first trading day of the week, with sharp falls in major tech names contributing to the Nasdaq Composite's 1.39 percent drop for the day. The tech-heavy index closed at 7,630 on Monday and has recorded a three-day decline of 3.86 percent, its largest since March.
So-called FANG stocks, referring to a group of large-cap technology sector shares, turned in a poor showing on Monday: Netflix led the declines and dropped 5.7 percent and Facebook lost 2.1 percent in the wake of its quarterly results and guidance disappointing last week.
The Federal Reserve's Federal Open Market Committee, meanwhile, was due to begin its own monetary policy meeting on Tuesday U.S. hours, with a decision due on Wednesday. The Fed is expected to keep rates steady at the end of its meeting.
The dollar index, which tracks the dollar against a basket of currencies, was mostly steady at 94.341.
— CNBC's Weizhen Tan contributed to this report.