Asian stocks rose on Tuesday as fears over a credit squeeze in China eased but trading volumes were thin in the absence of a lead from Wall Street overnight.
U.S. equity markets were closed for the 'Martin Luther King Jr Day' holiday on Monday.
Nikkei rises 1%
Japan's benchmark index snapped a 3-day losing streak to rebound from the previous day's one-week low as the dollar-yen approached the key 105 level. The declining currency propelled large-cap stocks higher; Fast Retailing gained 3 percent and closed 4.4 percent higher
Attention remains squarely on the Bank of Japan's policy meeting on Tuesday. Most analysts agree that the bank is unlikely to expand its asset purchase program, with some pinpointing April for a move, and others looking further ahead to October.
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Also helping sentiment were comments from Economics Minister Akira Amari, who said the economy seemed to have escaped from deflation.
Shanghai gains 0.9%
Mainland shares rebounded from the previous day's six-month low after the People's Bank of China (PBOC) injected funds into the market in early trade. The move follows Monday's decision to provide cash directly to banks through a short-term lending facility (SLF).
As a result, short-term money market rates eased, with the 7-day repurchase rate at 5.6 percent, down from the previous day's 6 percent high. Financials gained, with Founder Securities rallying nearly 5 percent and Haitong Securities 2.5 percent higher.
Property stocks extended previous day's rally with Shanghai Shimao 2.8 percent higher and Poly Real Estate up 1.3 percent after data on Monday showed that total property sales rose 26.3 percent in 2013, an annual 10 percent gain.
