Asian equity markets opened in mixed territory on Tuesday, with Japanese indices leading the volatility.
The Topix index declined 0.65%, while the Nikkei 225 traded largely flat after posting broad gains in early Monday trade.
The shift in sentiment follows a fresh round of peace talks between the United States and Iran, which has introduced new variables into the geopolitical risk premium that had previously supported regional equities.
The reversal highlights the sensitivity of Asian markets to diplomatic developments in the Middle East.
Monday's rally was driven by renewed optimism surrounding the US-Iran negotiations, but the latest updates have prompted investors to reassess the trajectory of the talks.
The mixed trading environment underscores the ongoing uncertainty surrounding the geopolitical landscape, with traders balancing hopes for a resolution against the risk of further complications.