Investing.com - Shares in Tokyo edged lower on Tuesday with a slightly stronger yen weighing on the market and Australia gave up most of its gains from the previous session with few cues to drive prices higher.
The Nikkei 225 fell 0.5% after losing 0.1% in the previous session.
The positive impact of a preliminary reading on the state of China's manufacturing sector, which rose to a seven-month high in May, faded on Tuesday as it may signal an end to now of any more stimulus measures from Beijing.
In Australia, mining stocks gained on the news on Monday, but on Tuesday the S&P/ASX 200 lost 0.4% -- giving up most of its 0.6% gain in the previous session.
Atlas Iron Ltd (ASX:AGO) dropped 2.9% and Fortescue Metals Group Ltd (ASX:FMG) was 0.6% lower.
South Korea's KOSPI was up 0.4%.
Overnight, U.S. stocks largely fell as investors locked in gains from the Federal Reserve's dovish policy language last week and sold for profits.
The Dow 30 fell 0.06%, the S&P 500 index fell 0.01%, while the NASDAQ Composite index inched up 0.01%.
Stocks posted solid gains after the Federal Reserve last Wednesday left benchmark interest rates unchanged at 0.00-0.25% and cut its monthly bond-buying program to $35 billion from $45 billion.
While not a surprise, somewhat dovish language sent stocks gaining, as the U.S. central bank is seen leaving benchmark interest rates unchanged for a while after it closes its stimulus programs.
By Monday, investors felt stock prices had risen too high and sold for profits despite upbeat U.S. data.
The National Association of Realtors reported earlier that existing home sales hit 4.89 million in May, up 4.9% from April's revised 4.66 million rate and above market calls for 4.73 million units.
Elsewhere, Markit Economics reported that U.S. manufacturing PMI rose to 57.5 in June from 56.4 in May, beating market calls for a 56.1 reading.
Separately, geopolitical concerns dampened demand for equities.
A bloody Sunni insurgency in Iraq steered investors towards safe-haven assets like gold and away from stocks, as fears continued to persist the U.S. will become increasingly involved in the conflict, which could threaten recovery.
Iraqi Prime Minister Nuri al-Maliki has agreed to a July 1 deadline to create a new government, a step required by Washington if Baghdad receives U.S. assistance in battling the insurgents.
On Tuesday, the U.S. is to release private-sector data on consumer confidence, as well as a report on new home sales.