The Japan Exchange Group logo is displayed on a glass door at the Tokyo Stock Exchange (TSE) in Tokyo, Japan. Kiyoshi Ota | Bloomberg | Getty Images

Asia markets were largely positive on Tuesday, despite an escalation in trade tensions between the United States and China. Japan's rose 1.41 percent to close at 23,420.54, while the Topix index ended the trading day 1.81 percent higher at 1,759.88. In South Korea, the Kospi was up by 0.26 percent to close at 2,308.98 as the performance of blue chip stocks was mixed. Shares of were up by 0.78 percent and Hyundai Motor saw gains of 0.39 percent, while Korea Electric Power Corporation slid by 1.01 percent. South Korean President Moon Jae-in left for Pyongyang on Tuesday for a historic summit with North Korean leader Kim Jong Un, with the aim of mediating stalled U.S.-North Korea nuclear talks and to strengthen inter-Korean relations, according to Yonhap news agency. Australia's ASX 200 was among the minority which saw a decline, as it fell by 0.38 percent to close at 6,161.5, with the energy sector lower by 1.53 percent. The heavily-weighted financial subindex ended the trading day largely flat as AMP fell by 1.56 percent.

Greater China markets bounce back from earlier slump

In the Greater China region, markets largely saw a recovery from their earlier slump. As of 3:30 p.m. HK/SIN, Hong Kong's Hang Seng index was up by 0.6 percent even though tech giant Tencent remained down by 0.25 percent. Over on the mainland, markets ended the trading day higher. The advanced by 1.82 percent to close at 2,699.95 while the Shenzhen composite climbed by 1.976 percent to close at 1,404.15. Earlier, the Reserve Bank of Australia's minutes from its September policy meeting had highlighted that global tensions from trade policy presented a "material risk to the outlook."

U.S.-China trade war heats up again

Stateside, President Donald Trump will impose 10 percent tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25 percent at the end of the year, according to a Monday announcement. The White House removed about 300 goods from a previously proposed list of affected products, including smart watches, some chemicals and other products such as bicycle helmets and high chairs. Beijing has already warned that it will retaliate against the measures. The U.S. has already levied tariffs on $50 billion worth of Chinese products. Beijing responded with measures targeting $50 billion on American goods, raising fears about damage to the U.S. farm industry.

Earlier this month, reports suggested that the U.S. was seeking to restart trade talks with China. Analysts said that the focus will now shift towards China's response to the announcement. "China may be limited in its ability to impose similar tariffs in volume terms, but it can still aim to disrupt the US supply chain with those tech exports an obvious target and the cancelation of trade talks is also likely to dampen the mood," Rodrigo Catril, a senior foreign-exchange strategist at the National Australia Bank, wrote in a morning note. "We think (the) US trade spat with China is not just about bringing manufacturing and jobs back to the US, strategically the US is not happy with the approach China has taken in order (to) modernise itself," Catril added, noting that one of the key sticking points is intellectual property rights.

Currencies and oil

In the currency market, the Japanese yen sustained weakness against the dollar, trading at 111.94, while the Australian dollar saw gains to 0.7194, as of 3:41 p.m. HK/SIN. At the same time, the dollar index, which measures the greenback against a basket of currencies, traded at 94.529, staying largely in a narrow band for much of the Asian trading day. Analysts at the Commonwealth Bank of Australia suggested that if China decided to cancel new trade talks in response to the U.S. tariffs action, the dollar would likely recover most of its recent losses. Oil markets saw declines in the afternoon of Asian trade. As of 3:43 p.m HK/SIN, the global benchmark Brent crude futures were down by 0.56 percent at $77.61 per barrel, while U.S. crude futures saw a decline of 0.41 percent at $68.63 per barrel.