That left the MSCI's broadest index of Asia-Pacific shares outside Japan, opens new tab 0.36% higher, hovering near the seven-month high touched last week. Japan's Nikkei, opens new tab gained 0.65% in early trade.

Chinese stocks were steady at the open after the local central bank cut benchmark lending rates for the first time since October, while five of China's biggest state-owned banks also lowered deposit interest rates.

The blue-chip index, opens new tab was 0.15% higher whereas Hong Kong's Hang Seng Index, opens new tab rose 1%.

U.S. Federal Reserve officials took on cautiously the ramifications of the Moody's downgrade and unsettled market conditions as they continued to navigate an uncertain economic environment in the wake of erratic U.S. trade action.

While not an imminent issue for the Fed, higher borrowing costs tied to a deteriorating U.S. financial position could make credit generally more expensive and create restraint on economic activity.

Traders have priced in two interest rate cuts from the U.S. central bank this year, versus four last month when President Donald Trump's tariff salvos upended markets and led to investors exiting U.S. assets.

"For now, U.S. exceptionalism and corporate resilience are offsetting the risks," said Charu Chanana, chief investment strategist at Saxo in Singapore.

"But how long before investors start demanding a higher risk premium, especially with the Fed in wait-and-see mode and trade talks seemingly stalling?"

Markets will be monitoring a U.S. congressional debate over a tax bill later in the day at which Trump is widely expected to be present ahead of a vote on the legislation later this week.
The measure would extend Trump's 2017 tax cuts and potentially add $3 trillion to $5 trillion to national debt over the next decade.

Investors will also watch out for a policy decision from the Reserve Bank of Australia, with cuts to interest rates widely expected. The Australian dollar was a tad weaker at $0.64485.

In commodities, oil prices were mixed as investors contended with a potential breakdown in talks between the U.S. and Iran over the latter's nuclear activity and weakened prospects of more Iranian supply entering the market.