Shares in mainland China surged on Tuesday, as a signal of an infrastructure boost from Beijing outweighed comments from U.S. President Donald Trump on the ongoing trade war between the two economic powerhouses.
The Shanghai composite rose 2.58% to close at about 2,925.72 and the Shenzhen component jumped 3.74% to finish its trading day at 9,037.67. The Shenzhen component soared 3.708% to close at 1,538.23. The CSI 300, which tracks the largest companies on the mainland, also gained 3.01% to close at approximately 3,719.28.
The moves on the mainland came after state news agency Xinhua reported Monday that China would enable local governments to use special bonds to finance certain investment projects, citing a "notice on local government bonds."
Elsewhere, Japan's Nikkei 225 close 0.33% higher to close at 21,204.28, while the Topix index added 0.54% to finish its trading day at 1,561.32. South Korea's Kospi rose 0.59% to close at 2,111.81 as shares of LG Electronics soared 6.03%.
Over in Australia, shares traded higher after returning from a holiday. The advanced 1.59% to close at 6,546.30 as most sectors saw gains.
Meanwhile, on the U.S.-China trade front, Trump told CNBC on Monday that China would have to make a deal with the U.S. "because they're going to have to."
The U.S. president also confirmed that more tariffs on Chinese goods will kick into place should Chinese President Xi Jinping fail to attend the upcoming G-20 meeting. The president previously threatened to put levies on another $300 billion in Chinese goods if a trade agreement is not reached soon.
"The end of month G20 meeting is gearing up to be another major 'binary' risk event that should keep markets very edgy in the coming days and weeks. It also complicates the (Federal Open Market Committee) meeting next week where the Fed has (to) decide whether downside risks to US growth justify an immediate shift to a formal easing bias," Ray Attrill, head of foreign exchange strategy at National Australia Bank, wrote in a morning note.
"It doesn't feel (like) the needle has moved a whole lot since June of 2018" as the accusations and measures from the U.S. "remain the same," Taimur Baig, managing director and chief economist at Singapore's DBS Bank, told CNBC's "Squawk Box" on Tuesday.
"There probably is some sort of a method to this gambit, if you will, but I fail to see it because so far it seems like the sort of rhetoric that is coming out of the White House is going to make it impossible for a trade deal to be achieved," Baig said.
Last week, Federal Reserve Chairman Jerome Powell said the U.S. central bank will "act as appropriate to sustain the expansion" after "closely monitoring" the impact of developments surrounding "trade negotiations and other matters."
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.751 following an earlier low of 96.728.
The traded at 108.55 against the dollar after seeing an earlier high of 108.34, while the changed hands at $0.6958 after its decline from levels above $0.7000 in the previous session.
Oil prices were higher in the afternoon of Asian trading hours, with international benchmark Brent crude futures edging up 0.61% to $62.67 per barrel and U.S. crude futures gaining 1.09% to $53.84 per barrel.
— CNBC's Michael Sheetz contributed to this report.