Asian shares edge down, oil stabilises after rout

Nikkei slips 0.5%, after breaking three-day winning streak in the previous session

Asian shares edged lower on Tuesday after downbeat economic data pressured Wall Street ahead of key US jobs data later this week that could provide a key clue to the timing of the US Federal Reserve's interest rate increase.

Crude oil prices stabilised after plunging overnight, with US crude adding about 0.6% to $45.42 a barrel. Brent gained 0.4% to $49.73 after skidding 5% to six-month lows.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2% in early trading, while Japan's Nikkei stock index slipped 0.5%, after breaking a three-day winning streak in the previous session.

US equities markets logged solid losses on Monday, after manufacturing data from China and US figures released on Monday both disappointed.

The Institute for Supply Management's index of national factory activity slipped to 52.7 in July, falling short of expectations that it would match last month's reading of 53.5.

The weak reading, combined with the rout in oil prices that raised fears of disinflation, led investors to pare bets that the U.S Federal Reserve's long-awaited interest rate hike will come as early as September.

Friday's jobs data is expected to show the US economy created 225,000 new jobs in July, according to economists polled by Reuters. The unemployment rate is expected to hold steady at 5.3%.

"In our view anything above 230k will be seen as significantly raising the odds of September lift-off and anything below 200k will be seen as significantly reducing these odds," Steven Englander, global head of G10 FX strategy at CitiFX in New York, wrote in a note to clients. 

The dollar edged down against its Japanese counterpart to 123.94 yen , while the euro was slightly higher at $1.0953 .

The weakness in oil prices, meanwhile, pulled the rug out from under commodity currencies.

The Canadian dollar was buying C$1.3159 per US dollar , after it notched 11-year years lows overnight with Canadian markets shut for a public holiday.

The Australian dollar last traded at $0.7271 , down about 0.2% on the day and moving back towards last week's six-year low of $0.7234 as investors awaited the outcome of the Reserve Bank of Australia's policy meeting at 0430 GMT.

Market participants widely expect the RBA to leave the cash rate unchanged at a record low 2.0%, but it could try to talk down the currency.