The kiwi dollar slumped 0.7 percent after the Reserve Bank of New Zealand cut interest rates by 25 basis points to 5.25 percent and projected more easing to come.

Adding to the busy news flow in the Asia morning were headlines that Japanese Prime Minister Fumio Kishida would step down as ruling party leader in September, ending a three-year term marked by rising prices and marred by political scandals.

The yen strengthened slightly to 146.53 per dollar and the benchmark Nikkei gave up gains to be flat after news of Kishida's resignation broke. Still, the Japanese stock index remains well above the lows hit after last week's massive selloff.

MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.5 percent. Hong Kong's Hang Seng, however, slipped 0.4 percent, and mainland blue chips lost 0.6 percent.

US equity futures were flat after a strong rebound on Wall Street overnight as data showed US producer prices rose by less than expected in July, suggesting inflation continued to moderate.

That led markets to nudge up the chance of an outsized half-point rate cut from the Federal Reserve in September to 53 percent from 50 percent a day earlier, according to the CME Tool.

Goldman Sachs lowered their expectations for the core Personal Consumption Expenditures (PCE) price index, the Fed's preferred gauge of inflation, to be up 0.14 percent in July, moderating from the previous forecast of 0.17 percent.

Investors now await all-important consumer price figures for July later in the day where economists look for rises of 0.2 percent in both the headline and core, with the annual core slowing a tick to 3.2 percent.

"Risk will find buyers if additional implied rate cuts are driven by a reduced inflation dynamic," said Chris Weston, head of research at Pepperstone.

"However, the opposite is true if any additional rate cuts are driven by weaker growth or poor labor market readings – this week's US retail sales report could therefore be influential on that thesis."

US bonds saw solid buying overnight with two-year yields at 3.4142 percent, having fallen seven basis points in the offshore session.

Ten-year Treasury yields held at 3.3341 percent after a drop of 5 bps overnight.

The US dollar was dragged lower by falling bond yields. It held at 102.62 against its major peers, having fallen 0.5 percent overnight.

The euro jumped 0.6 percent overnight and was last at $1.0996, nearing a major resistance level of $1.1.

In commodities, crude oil recovered some of the previous day's losses as estimates showed shrinking US crude and gasoline inventories. They had been on a winning streak on concerns about an imminent attack from Iran on Israel.

Brent crude futures rose 0.6 percent to $81.19 a barrel, while US West Texas Intermediate crude also gained 0.7 percent to $78.91.

Gold prices were 0.1 percent higher at $2,468.78 an ounce.