The most notable market impact from Sandy, one of the biggest storms ever to hit the United States, appeared to be felt in oil prices, which fell as forced closure of refineries reduced demand in the world's largest oil consumer.
Early reports suggested New York City was facing some of the worst-case scenarios forecasters had warned of, with widespread flooding through the city, while millions near the East Coast were without power.
"People can't go out, they can't use, they can't consume," said Jonathan Barratt, chief executive of Barratt's Bulletin, a Sydney-based commodity research firm. "Crude inventories are running pretty high, 11-12 percent above a 5-year average."
U.S. crude futures slipped to just above $85 a barrel on Tuesday, near the lowest in more than three months, while Brent crude edged down near $109 as investors watched for any impact on markets from Hurricane Sandy.
U.S. stock and bond markets will be closed again on Tuesday.
The MSCI index of Asia-Pacific shares outside Japan rose 0.3 percent, recovering from a two-week low hit on Monday. Seoul and Taiwan equities led the gains.
Taiwan stocks jumped 1.3 percent, pulled higher by LCD and computer makers following positive earnings news, while South Korean shares added 0.6 percent after a fall below a key level spurred bargain hunters.
Australian shares edged up 0.2 percent.
The world's largest money manager, BlackRock Inc, downplayed the impact of Europe's financial woes on commodities markets on Tuesday, and said robust Chinese demand and an improving U.S. economy will support growth. China is Australia's largest export market.
Japan's Nikkei average rose 0.4 percent.
The dollar inched up 0.1 percent to 79.86 yen, not far from a four-month high of 80.38 yen touched on Friday.
Markets expect the BOJ to ease policy by boosting asset purchases by at least 10 trillion yen. They also see a possibility of the central bank taking more measures to beat deflation and support the economy.
The dollar could fall in a knee-jerk reaction to the policy decision, but the weakness of the Japanese economy will likely keep the yen's underlying bear trend intact.
Data on Tuesday underscored the risk that the world's third-largest economy may slip into a mild recession. Japanese household spending unexpectedly fell 0.9 percent in September from a year earlier, while industrial production plunged 4.1 percent in September from the previous month, marking the biggest decline since the aftermath of last year's earthquake.
EURO LACKLUSTRE
Later on Tuesday, Hong Kong-listed Standard Chartered will unveil its quarterly trading update. The Asia-focused bank will likely show it is on track for a 10th straight year of record profits, but rising bad loans in some of its main markets such as India could dent its results.
Also on Tuesday, India's central bank will announce a policy decision. The bank faces growing pressure to cut interest rates for the first time since April after the finance minister pledged to rein in the country's fiscal deficit.
The euro was stuck in its recent range, steadying around $1.2913, but pressured by political jitters in debt-laden Italy and the uncertain bailout outlook for struggling Spain and Greece.
A threat by former Italian Prime Minister Silvio Berlusconi to withdraw support for Mario Monti's government pushed Italian and Spanish yields higher and supported safe-haven German Bunds and U.S. Treasuries on Monday.
Asian credit markets were lacklustre, with the spread on the iTraxx Asia ex-Japan investment-grad
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