Japanese stocks sold off in a mixed Asian session on Tuesday, dragged down by renewed strength in the yen after a local media report indicated the government's highly anticipated stimulus package may not live up to expectations.
Other Asian markets retraced some early losses, tracking declines in U.S. stocks after lower oil prices dropped more than 2 percent on Monday on renewed oversupply concerns. Market intelligence firm Genscape pointed to an inventory rise of 1.1 million barrels at the Cushing, Oklahoma, delivery point for U.S. crude futures in the week to July 22.
During Asian hours, oil prices recovered modestly, with U.S. crude up 0.16 percent at $43.20, after dropping by more than $1 on Monday, while global benchmark Brent added 0.36 percent to $44.88, after a 2.12 percent drop overnight.
According to Angus Nicholson, a market analyst at brokerage firm IG, "The energy space will be a key drag after the oil price crashed to a three-month low overnight. The materials space is unlikely to provide much lift either, after most industrial metals also headed lower."
Asian Markets Down
The benchmark Nikkei 225 was down 1.4 percent, while the Topix dropped 1.39 percent while in Korea, the Kospi was up 0.52 percent. Down Under, the ASX 200 fell 0.24 percent, with a 1.87 percent drop in the energy sector.
In Hong Kong, the Hang Seng index was up 0.9 percent, reversing earlier losses of 0.32 percent. Chinese mainland shares gained, with the Shanghai composite up 0.45 percent and the Shenzhen composite higher by 0.53 percent.