With Wall Street closed for a holiday, there were few major catalysts to drive business, though investors remain on their toes after the US president's threat of 50 percent tariffs on European Union goods and subsequent delay reviving volatility.

But analysts said the uncertainty caused by Trump's capricious policy announcements, along with his plans to extend tax cuts, was hurting confidence in the US economy and pushing Treasury yields higher.

"Markets are once again dancing on hot coals, front-running White House mood swings while dodging macro landmines," said Stephen Innes at SPI Asset Management.

"With yields dangling like anvils and tariff threats swinging like wrecking balls, the only thing certain is that the music won't stop -- until it does. Traders, keep your running shoes on."

Europe bounced on the news of the tariff delay, and European Commission President Ursula von der Leyen's pledge to move swiftly on a trade deal with the White House.

But Asia swung between gains and losses.

Tokyo, Hong Kong, Sydney, Singapore and Wellington all rose with London as it reopened after a long weekend, while Frankfurt and Paris also extended Monday's gains.

Shanghai, Seoul, Manila, Mumbai, Jakarta, Bangkok and Taipei were slightly lower.

The yen rose against the dollar after BoJ boss Kazuo Ueda said he intended to keep raising borrowing costs if the economy performs as expected.

But the Japanese currency reversed course after yields on Japanese bonds sank after reports of a questionnaire from the finance ministry asking market players for their views on debt issuance.

The moves come after the sale of 20-year notes saw the worst response in more than 20 years, putting pressure on officials to stabilise the market. Yields on long-term bonds sank after hitting record highs last week.

The yen, which hit 142.12 per dollar in early trade, retreated to 143.86 in the afternoon.

Still, the dollar remains under pressure against its main peers as investors look nervously at Trump's trade policy and tax bill, which could add trillions to the US national debt, putting upward pressure on US yields.

"In a way, all roads have led to a weaker dollar. Higher perceived US deficits have raised concerns about increased future Treasury issuance, pushing up term premium and seeing people migrate away from the dollar," said Pepperstone's Chris Weston.

"Concerns of weaker US growth in the second half of 2025 sees dollar sellers. Tariff risk resurfaces, the dollar trades lower and when the tariff risk and the implementation date is subsequently pushed back, again we see the dollar lower."

Traders are also awaiting the release of minutes from the Federal Reserve's May policy meeting, hoping for an idea about its plans in light of the trade war, while the central bank's preferred inflation gauge is due at the end of the week.

- Key figures at around 0810 GMT -

Tokyo - Nikkei 225: UP 0.5 percent at 37,724.11 (close)

Hong Kong - Hang Seng Index: UP 0.4 percent at 23,381.99 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,340.69 (close)

London - FTSE 100: UP 0.9 percent at 8,794.85

Dollar/yen: UP at 143.77 yen from 142.81 yen on Monday

Euro/dollar: DOWN at $1.1342 from $1.1382

Pound/dollar: DOWN at $1.3524 from $1.3563

Euro/pound: DOWN at 83.88 pence from 83.91 pence

West Texas Intermediate: DOWN 0.4 percent at $61.29 per barrel

Brent North Sea Crude: DOWN 0.3 percent at $64.56 per barrel

New York - Dow: Closed for a holiday