Losses were largely modest across Asia in line with a lackluster session on Wall Street. The dollar resumed its slide against the yen after climbing in recent days amid hopes the U.S. might stage a quicker-than-expected rebound.
On Monday, however, Fed Chairman Ben Bernanke said the world's largest economy was facing "" - including a weak job market, cautious consumers and tight credit - that would limit the pace of recovery.
Bernanke also reaffirmed his pledge to keep interest rates at record lows for an "extended period," dousing expectations the Fed might hike rates sooner than thought after a jobs report last week showed the unemployment rate dropped to 10 percent.
"The crisis was just last year. You can't expect the nightmare to go away that soon," said Winson Fong, managing director at SG Asset Management in Hong Kong, which oversees about $2 billion in equities in Asia,
"They're just buying time to let the real economy recover. In the meantime, they're going to maintain the stability of the markets and asset prices," he added. "This hiccup seems a good time to buy. There's too much money out there to let the market go down in a big way for now."
European markets traded sideways early going, with Britain's FTSE 100 down 0.1 percent, Germany's DAX up 0.2 percent and France's CAC-40 gaining 0.2 percent.
In Asia, news that Japan was moving ahead with $81 billion in new stimulus spending did little to enthuse investors. The world's No. 2 economy grew for the second straight quarter in the July-September period, but falling prices have raised concerns about a cycle of deflation that could hinder the country's rebound.
The Nikkei 225 stock average lost 27.13 points, or 0.3 percent, to 10,140.47.
"There were no surprises from the package, including the amount of new spending. The market reaction was pretty much muted," said Kazuhiro Takahashi, equity strategist at Daiwa Securities SMBC Co. Ltd.
In greater China, Hong Kong's Hang Seng dropped 264.44 points, or 1.2 percent, to 22,060.52, and Shanghai's market lost 1.1 percent to 3,296.66.
Elsewhere, markets in Australia and Taiwan fell about 0.1 percent.
Bucking the downward move, South Korea's key stock measure rose 0.8 percent to 1,627.78 and India's Sensex was up 1.1 percent to 17,175.77.
Overnight in the U.S., the Dow Jones industrial average rose 1.21, or less than 0.1 percent, to 10,390.11 after being up 54 points and down 29 points.
The broader Standard & Poor's 500 index fell 2.73, or 0.3 percent, to 1,103.25. It's up 22.1 percent for the year.
U.S. futures pointed to a lackluster open Tuesday. Dow futures were down 1 point, or less than 0.1 percent, to 10,390.
In oil, benchmark crude for January delivery was down 3 cents to $73.90 in Asia. The contract fell $1.54 to settle at $73.93 on Monday.
Gold prices were down $4.10, or 0.4 percent, at $1,159.90.
The dollar declined to 88.95 yen from 89.49 yen. The euro was slightly lower at $1.4817 from $1.4820.