Asian stocks were mostly sluggish on Tuesday after weakness on Wall Street, while the dollar sagged following news that investigators probing Russian interference in the 2016 US election had charged President Donald Trump's former campaign manager.

Data showing a sharper-than-expected slowdown in China's October factory growth also curbed regional investors' appetite for riskier assets.

Beijing's war on winter air pollution is forcing many northern steel mills, smelters and factories to curtail production, adding to uncertainty amid early signs of a slowdown in the world's second-largest economy.

Shanghai shares lost 0.3 per cent and Hong Kong's Hang Seng retreated 0.35 per cent .

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2 per cent .

Japan's Nikkei lost 0.3 per cent , Australian shares were effectively flat and South Korea's KOSPI added 0.3 per cent .

Wall Street pulled back from record-high territory on Monday, weighed down by a drop in drugmaker Merck and a report that US lawmakers are discussing a gradual phase-in corporate tax cuts rather than reducing it all at once.

“The report of the gradual corporate tax cut option came when equities were strung high, so it served as a catalyst for markets to adjust,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

“Expectations were for the corporate tax to be cut in one go. But even if the cut is implemented gradually, it still is a reduction and that won't be bad news in the long term.”

The dollar hovered near a 10-day low of 113.02 yen struck overnight.

The greenback lost about 0.4 per cent against the yen overnight on investor caution following news of President Trump's former campaign manager Paul Manafort facing charges.

Manafort and another aide, Rick Gates, were charged with money laundering on Monday by Federal investigators.

“It's weighing on dollar/yen a little bit. I think there's a little bit of uncertainty,” said Stephen Innes, head of trading in Asia–Pacific for Oanda in Singapore, adding the yen drew some support as risk sentiment was looking a bit wobbly.

The US currency was also pressured as Treasury yields slipped on reports that President Trump is likely to appoint Federal Reserve Governor Jerome Powell, who is viewed as more dovish than other contenders, as the next head of the Federal Reserve.

The 30-year Treasury bond yield fell to its lowest in a week after Bloomberg quoted Treasury Secretary Steven Mnuchin saying the government does not see a lot of demand for ultra-long bonds.

The dollar index against at basket of six major currencies steadied at 94.596 after slipping overnight from a three-month high of 95.150.

The euro was little changed at $1.1635. It had pulled back overnight from a three-month low of $1.1574 on Friday.

European markets got a lift on Monday after an opinion poll showing waning support for independence soothed investors' concerns over a Catalan secession from Spain.

Crude oil prices managed to hold just below their recent peaks after being boosted by expectations OPEC-led production cuts would be extended beyond March.

Brent crude futures was down 0.05 per cent at $60.87 a barrel after rising to $61 overnight, the highest since July 2015.

US crude was 0.2 per cent lower at $54.05 a barrel after touching $54.46, highest since late February.

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