Oil prices fell to four-week lows and the dollar hit a fresh one-month high against the yen on Tuesday, boosting Japanese exporters, but worries over corporate earnings halted Australia's record-breaking rally. US oil fell half a percent to $45.06 a barrel, its lowest since January 6., weighed down by signs that Opec would not cut output ahead of its March meeting and forecasts for rising US crude stockpiles.
The dollar rose versus the yen after the United States announced budget cuts just days after Fed chief Alan Greenspan said market forces and greater US budget discipline should help reduce the country's record current account gap.
The strong dollar pushed gold down to $412.50 an ounce, close to the $412.25 seen on Monday, its lowest in nearly four months.
Japan's Nikkei index finished 0.08 percent lower at 11,490.43, after rising 1.2 percent on Monday to its highest close in four weeks.
"I see a change in the market's current ... buyers are now coming back to tech stocks, from domestic stocks, thinking that the worst period is over (for techs) after they reported poor earnings last week," said Tachibana Securities' adviser Masaharu Sakudo.
Chip stock Kyocera Corp gained 0.8 percent, while shares in Sony Corp rose 1.3 percent and Canon Inc climbed 0.6 percent.
The stronger dollar also helped exporters, with Honda Motor gaining 0.7 percent.
Drug makers fell after CSFB downgraded Eisai Co to 'neutral' from 'outperform'.
Eisai slid 2.2 percent and Yamanouchi Pharmaceutical fell 2.4 percent. MSCI's broadest index of Asia Pacific shares outside Japan dropped 0.4 percent by 0615 GMT after hitting a seven-year high on Monday.
Australia's benchmark S&P/ASX 200 fell 0.3 percent, after a series of record highs in recent days, as worries over corporate earnings took their toll.
Boral Ltd, Australia's second-largest building products maker, slid 4.8 percent after it missed market forecasts and warned of more softness ahead in the housing sector.
Commonwealth Bank fell 0.9 percent ahead of its earnings on Wednesday.
Singapore shares rose 1 percent to their highest close in more than four years as lenders gained on hopes of strong quarterly earnings later this month.
Shares in Hong Kong finished up 0.4 percent at a one-month high on hopes for a traditional New Year rally when the market reopens next week.
Hong Kong and Singapore closed for the Lunar New Year after a half-day session, while Taiwan and South Korea were already closed.
The dollar rose to a one-month high around 105.18 yen from 104.84 in late New York. The euro traded around $1.2761, after falling to a three-month low of $1.2732 on Monday.
It fetched 1.2757 in late New York trade. "The dollar is still supported by Greenspan's comments," said Toshiaki Kimura, chief forex manager at Mitsubishi Trust and Banking.
"That, along with the US stance for a tighter fiscal policy, is improving the dollar's outlook."
US President George W. Bush on Monday submitted a budget plan that forecast a narrowing in the budget deficit to 1.7 percent of gross domestic product by 2008 from 3.5 percent in the current fiscal year.
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