Asia Shares Lackluster; Cautious Tone Prevails

Asian stocks were mostly lower on Tuesday, struggling to gain momentum in the absence of fresh market catalysts and amid caution in Japan as investors await the appointment of Japan's next central bank governor.

Former top bureaucrat Toshiro Muto is the leading candidate to head the Bank of Japan as present Governor Masaaki Shirakawa steps down next month, but analysts say Muto's nomination would result in less radical monetary measures than markets are currently anticipating. Expectations of strong easing have helped fuel a rally in the Nikkei, which is up almost 10 percent since the start of the year.

(Read More: Look Out! Correction Looms for Soaring Nikkei)

"Toshiro Muto, Kazumasa Iwata and Haruhiko Kuroda are the three front-runners. Muto is probably seen as less market supportive whilst Iwata would be very good from a yen weakness and stock point of view," remarked Robert Rennie, global head of FX strategy at Westpac Bank.

Companies such as Bridgestone have benefited from a weak yen to fuel profits after the world's largest tire maker announced that it expects to break an eight-year-old profit record this year, sending shares soaring over 10 percent.

However, the weaker currency also brings higher import prices and investors are expected to pay attention to just how much currency depreciation has impacted corporate bottom lines.

Electrical equipment makers suhc as Fanuc weighed on the index as the industrial robot maker lost 4 percent on weak machine tool orders data from China.

Strong earnings results in Australia helped the market close up 0.4 percent to a fresh four-and-a-half-year high. The corporate reporting season has lifted the benchmark indexover 2 percent in the past five sessions.

Amid big movers, shares of Coca-Coal Amatil increased by 2 percent after the soft drink developer posted a 6.3 percent rise in full year revenue.

Southern Cross Media jumped more than 9 percent after the broadcaster reported a net profit of $45 million, a 52 percent drop from the previous corresponding period.

Shanghai markets extended losses for a second consecutive session, dragged down by real estate stocks on concerns that rising property prices would lead to new tightening measures.

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In Seoul, a rebound in auto stocks helped the benchmark KOSPI to close marginally higher. Hyundai Motor added 0.5 percent and Kia Motor jumped more than 2 percent after the yen strengthened on Tuesday.