Asia-Pacific currencies mostly appreciated against the greenback on Tuesday amid uncertainties over U.S. President Donald Trump's policies, including his spending bill and tariff plans.

The U.S. dollar index, which measures the greenback against six major currencies, fell 0.13% to 96.745 as of 1.25 p.m. Singapore time.

The Japanese yen, which is traditionally viewed as a safe asset during times of tumult, strengthened 0.23% against the dollar to 143.68.

Similarly, the Indian rupee appreciated 0.11% against the dollar to 85.59, while China's offshore yuan strengthened marginally by 0.01% against the dollar to 7.5175.

The Australian dollar also strengthened 0.11% against the dollar to 0.6573, as did the Taiwanese dollar, which edged 0.07% higher to 29.161.

Meanwhile, the South Korean won depreciated 0.03% against the dollar to 1,352.82.

Elsewhere in Southeast Asia, the Singapore dollar was largely unchanged against the greenback at 1.2715, while the Thai baht weakened by 0.15% to 32.46.

The Philippine peso strengthened marginally by 0.08% to 56.23, while the Malaysian ringgit gained 0.48% to 4.19.

— Amala Balakrishner

Manufacturing activity in South Korea contracted for the fifth consecutive month in June as firms reported sustained, albeit slower, contractions in output and new order intakes, data from a private sector survey released Tuesday showed.

The S&P 500 Global South Korea Manufacturing Purchasing Managers' Index rose to 48.7 in June, from 47.7 in the month before. The reading also came in below the 50-point mark separating growth from contraction for the fifth consecutive month.

The lower reading also followed a decline in purchasing activity following a reluctance to hold excess inventories as well as a fall in employment, the survey results showed.

Looking ahead, Usamah Bhatti, economist at S&P Global Market Intelligence says the outlook for the coming months "appears mixed," as firms reported a moderate decline in employment alongside decreasing levels of outstanding business, and a pick up in sentiment.

— Amala Balakrishner

Manufacturing activity in Japan rose in June for the first time in 13 months on the back of higher output. However, demand remained weak as new orders and export sales continued to decline, data from a private sector survey released Tuesday showed.

The au Jibun Bank flash Japan Manufacturing Purchasing Managers' Index rose to 50.4 in June, coming in above the 50-point mark separating growth from contraction for the first time since May 2024.

June's reading also surpassed the 49.4 seen in May.

"The latest PMI data signalled that demand conditions remained challenging for Japanese manufacturers in June, with firms recording further drops in sales both at home and overseas," Annabel Fiddes, economics associate director at S&P Global Market Intelligence wrote in a Tuesday note.

"We will need to see a renewed and sustained improvement in customer demand, which remains dampened by ongoing uncertainty regarding US tariffs, in order to see a sustained recovery in production," she added.

— Amala Balakrishner

Business sentiment among large Japanese manufacturers improved in the three months to June, the Bank of Japan's quarterly Tankan survey showed.

The headline index measuring big manufacturers' business confidence came in at +13 in June, up from +12 in March and the +10 forecasted by analysts polled by Reuters.

Meanwhile, a separate index gauging sentiment among big non-manufacturers edged down to +34 from +35 in March, in line with analysts' predictions.

The Tankan survey, which calculates the difference between companies that have optimistic business outlooks vs. those that hold negative sentiments, is a closely watched indicator by Japan's central bank. The BOJ will take the findings of the survey, among others, into consideration when reviewing its monetary policy stance at its meeting between 30 and 31 July.

— Amala Balakrishner

Japan's Nikkei 225 fell in early trade Tuesday, reversing course from its over 11-month high in its previous session.

The 225-stock share average fell 0.67% to hit 40,233.53 at 9.10 a.m. local time, while the broader Topix index moved down 0.3% to 2,844.27.

Nikkei 225

Asia-Pacific markets were set to open lower on Tuesday.

Japan's benchmark Nikkei 225 was set to open lower, with the futures contract in Chicago at 40,330 while its counterpart in Osaka last traded at 40,250, against the index's Monday close of 40,487.39.

Australia's S&P/ASX 200 is set to open marginally lower with futures tied to the benchmark at 8,531 compared to its last close of 8,542.30.

Hong Kong markets were closed for a public holiday.

— Amala Balakrishner