Japanese household spending suffered its biggest drop in nearly 2-1/2 years squeezed by rising prices, although volatility in some items meant the outlook might not be as gloomy as the headline figures suggested.

Chinese service sector activity grew at a slower-than-expected pace in August, a private survey showed on Tuesday, with slowing overseas demand being the key source of pressure on service providers.

China's services activity expanded at the slowest pace in eight months in August, a private-sector survey showed on Tuesday, as weak demand continued to dog the world's second-largest economy and stimulus failed to meaningfully revive consumption.

Oil prices fell slightly from their strongest levels for the year on Tuesday as markets waited on Russia and the OPEC+ to outline more production cuts, while focus also remained on more Chinese cues this week. 

Asian equities fell on Tuesday as the spotlight remained on China and its efforts to stabilise its stuttering post-pandemic economy, while traders awaited the outcome of a policy meeting of the Reserve Bank of Australia.

The dollar was firm on Tuesday and the Aussie under a little pressure as traders watched out for the Reserve Bank of Australia's interest rate decision with bets that rates may have peaked.