The Australian dollar held gains before a meeting by the Reserve Bank of Australia where it is expected to hold pat on policy. Oil fell on prospects for increased production from OPEC+, while China's manufacturing activity shrank for a sixth month in September, official data showed.

US Vice President JD Vance said the government appeared "headed to a shutdown" after little progress in budget talks between President Donal Trump and Democratic opponents.

A government closure would halt the publishing of critical employment numbers later this week, putting the spotlight on the Labor Department's JOLTS report on August job openings due later on Tuesday.

"It does look as though markets are bracing themselves for the likelihood that we will see a shutdown," Ray Attrill, the head of FX research at National Australia Bank, said on a podcast. "If we know we're not going to get the payrolls numbers, it will just shine a brighter spotlight on the numbers that we do have."

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5 percent in early trading, poised for a 5.6 percent gain this month that would be the best in a year. Japan's Nikkei stock index slid 0.3 percent, down for a third day.

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The dollar was flat at 148.62 yen after a 0.6 percent slide on Monday. The euro was little changed at $1.1723. The Australian dollar strengthened 0.2 percent versus the greenback to $0.6587.

The US JOLTS report is the first of several indicators expected ahead of the September employment report due Friday that is considered key to the Federal Reserve's calculations for the timing of rate cuts. A protracted closure could leave the Fed flying blind on the economy when it meets on Oct. 29.

Analysts expect JOLTS to show job openings held firm at around 7.18 million in August.

"The most immediate implication for the markets is the shutdown may delay the release of certain data, including the critical non-farm payrolls report," Capital.com analyst Kyle Rodda wrote in a note.

"The primary focus for market participants is currently the path forward for US interest rates, with asset prices being supported by the notion that cuts are coming and they could end up being relatively deep."

Without a deal, a US government shutdown would begin from Wednesday, the same day when new US tariffs are supposed to go into effect on heavy trucks, patented drugs and other items. The White House announced revised tariffs on furniture and cabinets late on Monday that are due to kick in on October 14.

In Asian economic data, China's purchasing managers' index (PMI) rose to 49.8 in September versus 49.4 in August, below the 50-mark separating growth from contraction. It suggested producers are waiting for further stimulus to boost domestic demand, as well as clarity on a US trade deal.

The economic and trade uncertainty was a tailwind for gold, which reached an all-time high $3,843.49.

Oil remained weaker due to an anticipated production increase by OPEC+ and the resumption of oil exports from Iraq's Kurdistan region. US crude dipped 0.6 percent to $63.07 a barrel, while Brent crude fell 0.6 percent to $67.51 per barrel.

In early European trading, the pan-region Euro Stoxx 50 futures were down 0.11 percent at 5,524, German DAX futures were down 0.07 percent at 23,890, and FTSE futures were down 0.06 percent at 9,355.

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