This is CNBC's live blog covering Asia-Pacific markets.

Japan's Nikkei 225 index ended above 40,000 on Tuesday after the country's central bank raised interest rates for the first time since 2007.

The Bank of Japan officially ended its negative interest rate policy, hiking rates for the first time in 17 years to 0% to 0.1% from -0.1% . The bank also abolished its yield curve control policy, marking a historic shift in policy.

Japan's Nikkei 225 whipsawed following the news but ended the day 0.66% higher at 40,003.60. The broader Topix closed 1.06% higher at 2,750.97.

In another monetary policy meeting, the Reserve Bank of Australia held its benchmark rate at 4.35% for the third meeting in a row.

"While recent data indicates that inflation is easing, it remains high," the bank said in a statement, adding that its board expects that it will be "some time yet" before inflation comes down to the RBA's target range of 2%-3%.

The S&P/ASX 200 closed 0.36% up at 7,7703.20 after the decision, extending gains from Monday.

South Korea's Kospi fell 1.10% to close at 2,656.17, while the small-cap Kosdaq inched 0.29% lower to end at 891.91.

Hong Kong's Hang Seng index slid 1.13%, and the mainland Chinese CSI 300 closed 0.72% lower at 3,577.63.

Overnight in the U.S., all three major indexes rebounded as tech companies gained, while investors awaited monetary policy guidance from the Federal Reserve.

Nvidia shares rose 0.7% on the first day of the company's GTC Conference — where the chipmaker is expected to showcase its latest inroads in artificial intelligence. Shares of Alphabet ended 4.6% higher after Bloomberg News reported that Apple was in talks with Google to include the company's Gemini AI in iPhones.

The Dow Jones Industrial Average rose 0.2%, while the S&P 500 gained 0.63%. The Nasdaq Composite climbed 0.82%.

— CNBC's Lisa Kailai Han and Brian Evans contributed to this report

Japan banks see volatile trade after BOJ ends negative interest rate policy

Shares of Japanese banks saw volatile trade after the Bank of Japan ended its negative interest rate policy and raised rates for the first time in 17 years.

Mitsubishi UFJ plunged as much as 3.03% just after the decision, leading losses among financial stocks, before paring losses.

Shares of Sumitomo Mitsui Financial Group and Mizuho Financial were marginally below the flatline, while Nomura Holdings lost 0.2%.

— Lim Hui Jie

Bank of Japan hikes interest rates after 17 years, abolishes yield control curve policy

Japan's central bank raised interest rates for the first time since 2007 on Tuesday and also did away with its yield control curve policy. Japan had negative rates in place since 2016.

The BOJ hiked its short-term rates to around 0% to 0.1% from -0.1%, according to a statement.

Japan's central bank also announced that it abolished its yield curve control policy for 10-year Japanese government bonds, which it employed to target longer-term interest rates by buying and selling bonds as necessary.

The Nikkei 225 index was down 0.7% in volatile trading, while the broader Topix remained flat. The Japanese yen weakened against the dollar to last trade at 149.60.

— Shreyashi Sanyal

Fidelity International to cut 16% of China unit staff, Longi lays off 5% of employees: Reuters

Fund manager Fidelity International is planning to lay off 20 people at its main China business unit, Reuters reported, citing sources.

This comes amid a downturn in China's markets as well as a global downsizing by the firm, the report said. Fidelity's China fund unit currently houses around 120 employees.

Separately, leading solar products manufacturer China Longi will lay off 5% of its staff, due to "market changes and [to] improve organizational efficiency," Reuters reported.

Longi also refuted a Bloomberg report on Monday that alleged the company plans to cut nearly a third of its staff.

— Lim Hui Jie

China and New Zealand ready to implement upgraded FTA, China foreign minister says

Chinese Foreign Minister Wang Yi said on Monday that China was ready to work with New Zealand to implement the upgraded free trade agreement between the two countries.

Both parties should launch negotiations on the negative list of service trade as soon as possible to push bilateral cooperation to a new level, Wang told his New Zealand counterpart Winston Peters, according to Chinese state news agency.

China's door to the world will open even wider, Wang reportedly said. He also pledged to forge closer cooperation with New Zealand in the decade to come, emphasizing on the need to safeguard free trade.

—Lee Ying Shan

Japan's finance minister says pay hikes driving positive economic momentum: Reuters

Japan's finance minister, Shunichi Suzuki, said this year's wage talks have produced big pay hikes because Japan is experiencing positive signs in the economy, according to a Reuters report.

Last week, initial estimates from Japan's largest union, Rengo, indicated that major firms had agreed to a pay increase of 5.28% — the highest in 33 years.

The government will deploy various policies so that positive momentum in wage growth will continue, Suzuki told reporters, according to the Reuters report.

— Reuters, Lim Hui Jie

BOJ needs to show the Japanese economy 'is being taken out of the emergency room': Monex Group

Raising interest rates would show that "the Japanese economic recovery is sustainable," Jesper Koll, expert director at financial services firm Monex Group said on CNBC's "Squawk Box Asia."

"The patient, the Japanese economy is being taken out of the emergency room and starting to walk on its own," he said.

As investors prepare for the Bank of Japan to raise its benchmark interest rates, Koll warned that if the BOJ keeps the status quo today, "it will be disappointing in many different ways."

— Lim Hui Jie

CNBC Pro: Worried about lofty valuations? Berenberg names 5 'top pick' stocks in a 'cheap' sector

As concerns swirl about lofty stock market valuations and investors focus on AI companies, strategists at Berenberg see one sector as a relative bargain.

The investment bank pointed out that investors in that one sector outperformed the market by an average of 108% – or more than doubled their money – when they invested on three occasions in the past when valuations were similarly depressed as the current levels.

CNBC Pro subscribers can read more here.

— Ganesh Rao

CNBC Pro: Fund manager says this software stock is set to be a 'serious player' in AI, gives it nearly 50% upside

One stock is a "promising AI investment" and set to be a "serious player" in a corner of the space, according to Brian Stutland of Equity Armor Investments.

"They are really starting to become very creative in the AI world," Stutland, a portfolio manager at the firm, told CNBC's "Street Signs Asia" this week.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Doubt may be starting to creep into the stock market's optimism, Deutsche Bank says

The stock market has been on an upwards tear since last fall, with all three major indexes notching new record closes already in 2024.

But there are already several signs that doubt is beginning to creep into market optimism, according to Deutsche Bank.

"When the rally is that fast, it's always hard to maintain the speed of those gains. Moreover, there are signs that inflation is still proving persistent, with investors moving to price out the chance of rate cuts in response," wrote macro strategist Henry Allen.

In a Monday note, Allen shared five signs of a potential narrative shift:

1. "For the first time since October, the S&P 500 has now posted 2 consecutive weekly declines."
2. "There are clear signs that inflation is proving more persistent than expected a couple of months back."
3. "More inflation has led investors to dial back their expectations for rate cuts this year."
4. "The speed of the current equity rally has been very rapid, and history suggests it was always going to be hard to maintain that speed."
5. "When inflation is already above target, then easier financial conditions risk leading to a hawkish reaction from central banks."

— Lisa Kailai Han

Analysts bullish on potential Apple AI partnership

An artificial-intelligence partnership between Apple and Alphabet would be a win for both companies, analysts said Monday.

A report from Bloomberg said Monday Apple was in talks with Alphabet to license Gemini, its suite of generative AI tools, for future iPhones. Apple has also had discussions with OpenAI, the report said.

"A partnership that can incorporate GenAl features faster into iPhones (software features in 2024) and incremental hardware features in 2025 would be a positive for both Apple and for the potential partner if Apple ends up with an agreement," Bank of America analyst Wamsl Mohan said in a note Monday.

He sees an Al-driven multi-year upgrade cycle for Apple and the potential for gross margins to re-rate higher.

Meanwhile, Melius Research said a Google partnership would be a "reputational win" for the tech giant against Microsoft and OpenAI. Apple would get the bigger immediate win financially on a deal since it will allow it to take an asset-light approach to AI, analyst Ben Reitze said in a note Monday.

However, he wouldn't to count Microsoft out of the story just yet.

"A bidding war for Apple's digital real estate isn't a bad thing for its shareholders," he said.

Shares of Alphabet were up nearly 7% in midday trading, while Apple gained more than 2%.

— Michelle Fox

Fed meeting will be more about the future, strategist says

Markets will be looking past what the Federal Reserve does at its meeting this week and thinking more about what the future holds, according to Chris Larkin, the managing director of trading and investing at ETrade from Morgan Stanley.

"No one expects a rate cut on Wednesday, but after last week's double-dose of hot inflation data, everyone will be wondering whether the Fed is rethinking a June cut," Larkin said Monday.

Noting that the S&P 500 broke a record high for the ninth straight week, Larkin expects that "the market will need to like what it sees in the Fed's statement on Wednesday, and get confirmation from (Fed Chair) Jerome Powell that two months of sticky inflation numbers won't derail the Fed's game plan."

Futures market pricing is pointing to the first rate cut coming no sooner than June.

—Jeff Cox