Analysts said that stock markets have room for gains if U.S. lawmakers make progress on raising the debt ceiling. The House is set to vote on a motion to increase the nation's $16.4 trillion borrowing authority for three months.
Without congressional action, the Treasury sometime in late February or early March will not have enough money to pay for all of its obligations, creating the possibility of a first-ever default on the government's debts.
"A vote is expected today, and if it is passed as expected it should clear the very short term obstacles for risk appetite, although battles on automatic spending cuts and the budget itself are not so long away," said analysts at Credit Agricole CIB in a market commentary.
Japan's Nikkei 225 index tumbled 1.3 percent to 10,566.59, a day after the country's central bank announced widely expected measures to help the economy, including open-ended asset purchases starting in 2014. Some analysts said investors were disappointed that the central bank didn't take more aggressive measures.
Francis Lun, managing director of Lyncean Holdings in Hong Kong, said the Bank of Japan's latest efforts won't reverse two decades of stagnant growth without addressing the country's budget deficit and public debt, which ballooned under years of efforts to stimulate the economy.
"They are not doing anything to address the problem. They are just using the same old methods, of printing money to sustain economic growth. If you use that too often, it will lose its efficacy," Lun said.
South Korea's Kospi shed 0.5 percent to 1,987.99. Hong Kong's Hang Seng fell 0.4 percent to 23,559.29. Australia's S&P/ASX 200 bucked the trend, rising 0.2 percent to 4,787.80.
Among individual stocks, BHP Billiton rose 1.3 percent in Sydney after the mining giant's half-year iron ore production results exceeded expectations. Japan's Kobe Steel plummeted 7.5 percent while banking giant Nomura Holdings fell 3.7 percent.
Strong earnings reports from big U.S. companies helped push the Dow Jones industrial average to its eighth gain in nine sessions Tuesday. The gains came despite a report showing sales of previously occupied homes dipped in December from November.
The news wasn't as bad as it looked. Sales rose last year to 4.65 million, a 9.2 percent increase from the previous year and the most in five years.
The Dow closed up 0.5 percent at 13,712.21. The Standard & Poor's 500 index gained 0.4 percent to 1,492.56. The Nasdaq composite average rose 0.3 percent to 3,143.18. Tech behemoths Google and IBM reported solid earnings gains after the market closed.
Benchmark oil for March delivery was down 14 cents to $96.54 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 68 cents to close at $96.24 a barrel on the Nymex on Tuesday.
In currencies, the euro fell to $1.3309 from $1.3317 in New York on Tuesday. The dollar fell to 88.44 yen from 88.76 yen.
(Copyright 2013 by The Associated Press. All Rights Reserved.)