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HONG KONG  - Asia stocks reversed earlier losses while the dollar was pinned near two-week lows on Tuesday, with investors staying mostly cautious on fresh signs of slowdown in China's economy.

MSCI's gauge of Asia Pacific stocks outside Japan was up 1%, while Japan's Nikkei 225 bounced back strongly to stand 1.1% higher, despite weak July industrial output data.

Hong Kong's Hang Seng Index recovered and was up nearly 1% while China's benchmark CSI300 Index widened losses to 0.37%.

FTSE futures were trading 0.3% higher while E-mini futures for the S&P 500 index rose 0.35%, indicating strong momentum following Wall Street's all-time highs on Monday.

The dollar index stood at 92.537 against a basket of currencies, near its lowest level in two weeks, with trade seen driven by month-end flows as investors looked ahead to U.S. jobs figures later in the week.

"The dollar could fall further today amid month‑end flows, particularly against the euro...," Commonwealth Bank of Australia said in a note. "However, we still expect the dollar can firm into the end of the week. Concerns about the Delta variant slowing the economy and a strong August non-farm payrolls print are both potential dollar supports."

China's businesses and the broader economy came under increasing pressure in August as factory activity expanded at a slower pace while activity in the services sector contracted, raising the likelihood of more policy support to boost growth.

Beijing on Monday cut the amount of time players under the age of 18 can spend on online games to an hour on Fridays, weekends and holidays, sending down tech indices and stocks.

The CSI information technology sub-index slumped 2.67%. The ChiNext Composite start-up board was 2.51% weaker and Shanghai's tech-focused STAR50 index fell 2.8%​.

"Chinese tech sector is under pressure. Divergence should continue when market faces a lot of uncertainties over Chinese policies," said Edison Pun, senior market analyst at Saxo Markets.

Australian shares rose further with the S&P/ASX 200 up 0.65% by 0537 GMT.

"Asian shares traded sideways on Tuesday following a mixed handover from Wall Street," said Anderson Alves, an equities trader at global online trading platform ActivTrades.

"Tuesday's session is the last trading day of the month and some volatility is to be expected as traders hunt for liquidity while trying to get better prices for the monthly settlement, especially on the FX and rates space," he said.

U.S. and global equity benchmarks hit all-time highs on Monday, as the Federal Reserve appeared in no rush to step away from its massive stimulus.

Elsewhere, oil prices fell on concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output.

U.S. crude reversed losses to stay flat at $69.22 a barrel. Brent also trimmed losses to $73.41 a barrel, as Hurricane Ida weakened into a Category 1 hurricane within 12 hours of coming ashore as a Category 4.

"Eyes on OPEC+ meeting after hurricane Ida's hit, short-term supply shock is relieved and OPEC+ meeting could mean more future supply. Crude oil may return to weakness after strong rebound for about 10% last week," Pun said.

Spot gold gained 0.44% to $1,818.15 per ounce.