Asian stocks were rangebound in cautious trade on Tuesday, following Moody's downgrade of Greece's debt to junk status.
Japan's Nikkei average edged up 0.1 percent in thin trade and hovered near the key 9,900 resistance level for much of the day.
The benchmark Nikkei edged up 8.04 points to 9,887.89, while the broader Topix was flat at 878.83.
Financial shares provided support to the market. Nomura Holdings, Japan's top brokerage, pared early gains to close 1.88 percent higher, after Credit Suisse upgraded it to "outperform", saying that concerns about the company have mostly been factored in and that valuations have also dropped to an attractive level.
The brokerage also upgraded Mizuho Securities and Daiwa Securities to "outperform", noting that their low forecast price-to-book ratios, of less than 0.6 and around 0.7 respectively, make shares attractive.
Mizuho Securities jumped 4.1 percent to 229 yen and Daiwa climbed 2.8 percent to 406 yen.
Some blue-chip stocks took a breather after recent gains. Digital camera maker Canon fell 1.06 percent to 3,735 yen and industrial robot maker Fanuc shed 0.7 percent to 10,540 yen.
The euro was weaker on the yen at around 111.24 yen after soaring on Monday on strong European economic data, while the U.S. dollar was also lower on the yen at around
91.26 yen.
All Nippon Airways gained 2.8 percent to 290 yen after Morgan Stanley MUFG hiked its rating on the airline and raised the price target to 380 yen from 310 yen, citing the higher probability of net profits and a V-shaped earnings recovery in the business year starting next April.
Seoul shares also finished flat, with Moody's downgrade of Greece's debt weighing on sentiment. But continued foreign buying and firm gains in automakers buoyed the market.
The Korea Composite Stock Price Index (KOSPI) shed 0.03 percent at 1,690.03 points.
Shares in KB Financial Group shed 3.03 percent as the market awaited the final selection of its chairman on Tuesday afternoon.
But rises in auto issues gave the market support, as Hyundai Motor advanced 2.8 percent and Kia Motors climbed 3.1 percent.
Gains in key technology issues also helped, with Hynix Semiconductor rising 4.2 percent.
But retailers retreated after their recent rally. Lotte Shopping dipped 2.0 percent, poised to snap five consecutive gaining sessions. Shinsegae was down 0.95 percent.
Australian shares drifted either side in a tight range before ending flat with defensive sectors benefiting as investors remained jittery after a debt downgrade for Greece.
The benchmark index ended 0.5 points lower at 4,505.0 points on volume about two-thirds of average. The index rose 1.6 percent on Friday and was closed on
Monday for a public holiday.
New Zealand's benchmark NZX 50 index rose 1.2 points
Global miner BHP Billiton fell 0.4 percent, and smaller rival Rio Tinto rose 0.5 percent despite firm industrial metal prices.
Australia's central bank said it was able to leave interest rates unchanged in the near term as previous rate hikes gave it time to see how Europe's debt woes would affect the world economy and to wait for more information on domestic inflation.
News Corp dropped 3 percent. A source said it approached BSkyB with a bid to take full control of the British satellite broadcaster that valued the company at roughly 12 billion pounds ($17.6 billion), but it was rebuffed.
Rail and ports operator Asciano rose 1.3 percent to A$1.6 after it won a 10-year A$775 million ($666 million) contract to move 16.5 million tonnes a year of coal for miner Anglo American.
Aquila Resources fell 0.7 percent to A$8.66 after saying it was in dispute with a subsidiary of Brazilian mining giant Vale over the capital budget for a joint coking coal project.
Health Information software developer iSoft Group rose 10.2 percent after it said it continued to work with Computer Sciences Corporation on the management of its contract with the UK National Health Service.
In Hong Kong, the benchmark Hang Seng Index was little changed.
Suncorp Technologies surged 35 percent. The telephone assembly services provider said it would buy a fiber-optic backbone network operator in China for around HK$4.98 billion ($639.2 million).
China Lilang fell after the Chinese menswear retailer said one of its major shareholders, Ming Lang, would place 80 million shares, or a 6.67 percent stake, to professional and institutional investors at HK$8.50 each. The move would trim his stake in the company to 5.71 percent from 12.38 percent.
China Strategic slid after one of the buyers of AIG's Taiwan unit said it could talk about extending the stalled $2.2 billion deal if needed but hoped for a conclusion soon, its chief executive said on Monday.
Taiwan stocks advanced 0.9 percent to their highest close in nearly a month, after TSMC
and UMC forecast growing chip demand amid rising sales of PCs and other consumer devices
Analysts also said the increased likelihood that Taiwan and China would sign their much-discussed free-trade style agreement, which will cut tariffs on hundreds of Taiwan products, would sustain stocks.
Taiwan semiconductor Manufacturing Co (TMSC) rose 0.5 percent and United Microelectronics Corp (UMC) jumped 1 percent, helping push Taiwan's main TAIEX share index up 66.66 points to close at 7,454.06, the highest finish since May 19. The Taipei market ignored a downgrade of Greece's credit rating.
Top contract chipmaker TSMC forecast 7 percent annual growth in global chip sales from 2011-2016 at its shareholder meeting, while rival UMC told its shareholders that foreign exchange gains would help it beat its second-quarter revenue forecast.
Parts supplier Cheng Uei rose 1.3 percent after a newspaper reported that the company would raise prices and move some production facilities to inland China to escape rising costs in the country's coastal areas.
It was a subdued session for markets in Singapore and Malaysia.