Japan's factory activity contracted at a faster pace in July, a business survey showed on Tuesday, taking a hit from soft orders amid weakening global economic conditions.

Chinese manufacturing activity unexpectedly shrank in July, a private survey showed on Tuesday, highlighting the need for more stimulus measures from Beijing as the country’s biggest economic engines run out of steam.

China's factory activity swung to contraction in July, a private sector survey showed on Tuesday, with supply, demand and export orders all deteriorating as firms blamed sluggish market conditions at home and abroad.

Asian stocks edged toward a sixteen-month peak on Tuesday and oil held near recent highs as investors began to find more cause for cheer over global economic prospects than reasons to worry, even as data showed risks remain.

Oil prices fell slightly in Asian trade on Tuesday, hovering near three-month highs after a strong run of gains as markets digested mixed economic cues from major importer China, while strength in the dollar also weighed.

The yen slipped to a fresh three-week low on Tuesday as traders pondered the Bank of Japan's steps last week to tweak its yield curve control policy, while the Australian dollar was soft ahead of the Reserve Bank of Australia's policy decision.