Steel producers propped up the index after the Nikkei daily reported that Toyota Motor and Nippon Steel & Sumitomo Metal agreed to raise the price of steel sheet for the April-September period. Nisshin Steel jumped 6 percent and Sumitomo Metal Mining rose 4.4 percent.
Sydney pares gains
A rally in Australian gold miners helped the benchmark index briefly touch a new two-month high at the 5,027 mark after the yellow metal traded near a one-month high. The benchmark index closed down just 10 points shy of that level.
Both Alacer Gold and Newcrest Mining rallied over 5 percent each.
(Read more: Gold regains some luster, but can it keep shining?)
Shares of the world's fourth-largest iron-ore producer, Fortescue Metals, lost 1.7 percent after reporting a 24 percent quarterly increase in iron ore shipments.
Kospi up 1.3%
Strength in the Japanese yen propped up South Korean exporter stocks and lifted the benchmark index to its highest levels since June 13. Still, the benchmark index traded at a 40-point discount to it's 200-day simple moving average (SMA) of 1,944.
LG Electronics rallied 4 percent while the index's top component, Samsung Electronics, increased 2.7 percent. Steelmaker Posco rose 3.3 percent ahead of reporting second-quarter results later in the day.
One of Seoul's top department store operators, Lotte Shopping, ended 1.5 percent higher on reports that it is eyeing a $1-billion listing in Singapore next year.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC