Reuters -

Asian stocks shrugged off their early losses and steadied on Tuesday, though Japanese shares slumped as the yen clung to its gains even after the Bank of Japan held policy steady.

MSCI's broadest index of Asia-Pacific shares outside Japan added about 0.3 percent. Japan's Nikkei stock average bucked the regional trend and slumped 1.1 percent to touch its lowest levels in a week and a half.

The BOJ kept monetary policy steady on Tuesday and maintained its view the economy is likely to continue recovering moderately, signalling its confidence the country is making steady progress toward meeting the bank's price target. But some investors had hoped Japan's central bank would surprise with an announcement of more purchases of risk assets.

"I think the BOJ are hedging their view a little bit. There is an element of increased caution," said Hiroshi Shiraishi, senior economist at BNP Paribas Securities in Tokyo.

"We don't rule out the possibility of an increase in risk asset purchases like ETFs, but we are quite sceptical about a big increase in the monetary base target."

Data released shortly before Tokyo markets opened showed some economic resilience, as Japan's current account balance returned to a surplus in February for the first time in five months on stronger exports to Asia and rising income from overseas investments.

Wall Street gloom initially cast a shadow over the session. On Monday, the Nasdaq Composite suffered its worst three-session decline since November 2011 as Internet stocks tumbled, while the S&P 500's three-day fall was its steepest since late January.

Rising tensions in the Ukraine also tempered investor appetite for risk. Pro-Moscow protesters in eastern Ukraine seized arms in one city and declared a separatist republic in another, moves Kiev described on Monday as part of a Russian-orchestrated plan to justify an invasion.

Remarks from European Central Bank policymakers Ewald Nowotny and Yves Mersch bolstered the euro, curbing investors' expectations of near-term euro zone economic stimulus.

Nowotny said there was no need to act immediately to counter euro zone disinflation, while Mersch said that while the central bank was drawing up plans for large-scale asset purchases, action remained some way off.

The common currency was steady against the yen to 141.59 yen , remaining above Monday's more than one-week low of 141.12 yen.

Against the dollar, it was flat on the day at $1.3742 , having pushed off Friday's five-week nadir of $1.3672 to Monday's high of $1.3748.

Against the yen, the dollar fell about 0.1 percent to 103.02 yen, well off its 2-1/2 month high of 104.13 yen hit on Friday.

In commodity markets, gold was up about 0.3 percent from the previous session at $1,300.71 an ounce.

U.S. crude for May gained about 0.5 percent to $100.90 a barrel, pushed up by the renewed tensions over Ukraine, a major supply route for Russian gas to Europe. But the rise was capped by expectations of a U.S. crude oil stock build-up.