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Hong Kong - Japanese shares got a boost on Tuesday from a weaker yen but some other key Asian markets drifted lower on geopolitical concerns, with lower iron ore prices dragging on mining stocks in Sydney.
Tensions on the Korean peninsula have been weighing on sentiment, with concerns North Korea may soon build a nuclear-tipped missile that could reach the US.
US Vice President Mike Pence reiterated his country's commitment to the security of Japan on a visit to Tokyo Tuesday, as North Korea vowed to launch missile tests "every week" - ramping up fears over its weapons programme.
In an interview with the BBC, the nuclear-armed North also threatened "all-out war" if the US took any action against it.
"One suspects the concerns in North Korea have further to play out," said IG market strategist Chris Weston, citing worries of further missile testing in the near term.
Hong Kong slumped 1.39% after a two-day holiday, while Shanghai fell 0.8% despite positive Chinese GDP growth data released Monday.
Sydney also dropped 0.9% in post-holiday trade, with the nervous mood fuelled by weaker iron ore prices according to Ric Spooner, Sydney-based chief analyst at CMC Markets Asia.
Among those hit were Fortescue Metals, which gave up 7.5%, BHP Billiton, which fell 1.6% and Rio Tinto, which lost 1.9%.
But Tokyo stocks closed up 0.4% as the yen fell against the dollar, following reported remarks by US Treasury Secretary Steven Mnuchin that US tax reform is still scheduled for 2017 and that a strong dollar is good in the long run.
The dollar rose to ¥108.89 on Tuesday from rates in the mid-108 yen range before news on Mnuchin's remarks.
A weak yen is positive for Japanese exporters as it inflates their repatriated profits.
Seoul was also up, along with Jakarta, Singapore and Kuala Lumpur.
Spooner hinted that declines in gold and the yen - both considered safe bets in times of turmoil - may be a sign that geopolitical concerns are starting to ease with markets "taking a wait-and-see attitude".
In early European trade, London was down 0.4%, Paris was flat and Frankfurt added 0.4%.
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