Asian markets were mixed Tuesday after political gridlock in Washington triggered the first US government shutdown in 17 years, while upbeat regional economic data provided some cheer.

The dollar edged down against the yen, with investors saying the Capitol Hill stand-off made it less likely the Federal Reserve would start winding down its stimulus programme soon.

Tokyo gained 0.20 percent, or 28.92 points, to 14,484.72 and Seoul added 0.10 percent, or 1.91 points, to 1,998.87 but Sydney fell 0.23 percent, or 12.1 points, to 5,206.8.

Hong Kong and Shanghai were closed for a public holiday.

The US government shut down at midnight Washington time (0400 GMT) as Republicans and Democrats refused to give ground to reach a budget deal.

World markets had expected the deadline to pass with no breakthrough and shares had fallen in previous sessions.

Europe's main stock markets were also mixed at the start of trade. London's FTSE 100 dipped 0.06 percent, the CAC 40 in Paris was up 0.16 percent and Frankfurt's DAX 30 rose 0.28 percent.

The US closure will see about 800,000 federal staff told to stay at home, leading to the closure of numerous agencies in the first shutdown since 1996. President Barack Obama warned it will hit a nascent recovery in the world's biggest economy.

Obama accused Republicans of holding America to ransom with their "extreme" political demands for his flagship healthcare law to be delayed for a year before they give the go-ahead to any budget.

Tracey Warren of CMC Markets Stockbroking told Dow Jones Newswires: "A prolonged shutdown could have a major impact on confidence and on the US economy, and will likely see a delay in the release of (US) employment figures."

Adding to the sense of crisis, the two sides appear unlikely to reach a deal to lift the US borrowing limit by mid-October, when the government runs out of cash. This would leave it unable to service its debts and in turn possibly default.

However, Song Seng Wun, a regional economist with Malaysian bank CIMB, told AFP: "Asian markets are trying to see beyond what is an obvious case of politics coming in the way of common sense."

He said markets expect that the shutdown "would likely be temporary".

-- Japan confidence surges --

Market-watchers said investors seemed more interested in data nearer home.

In Japan, the central bank's quarterly Tankan survey surged to its strongest level since December 2007, showing that major manufacturers are confident about future prospects.

Prime Minister Shinzo Abe said Tuesday he would press ahead with a sales tax rise seen as crucial to cutting Tokyo's huge national debt. Critics say it could derail a recovery in Japan.

Jiji Press reported that Abe has decided to increase the tax from 5.0 percent to 8.0 percent.

The premier is also expected to unveil a stimulus package to help soften the blow.

In afternoon Tokyo trade the greenback was at 97.96 yen from 98.21 yen in New York. It had touched 98.70 in morning trade and 98.21 yen in New York on Monday afternoon.

The euro bought $1.3567 compared with $1.3524, while it fetched 132.89 yen against 132.81 yen.

In China the official purchasing managers' index of manufacturing activity crept up to a 17-month high of 51.1 last month from 51.0 in August, the National Bureau of Statistics said.

A reading above 50 indicates expansion while anything below signals contraction.

It is the latest in a series of recent data indicating the Chinese economy is picking up steam after suffering a slowdown in the first half of the year.

A separate survey by HSBC came in at 50.2 on Monday, up from 50.1 in August and much higher than an 11-month low of 47.7 in July.

On oil markets, New York's main contract, West Texas Intermediate for delivery in November, fell 30 cents to $102.03 in afternoon trade. Brent North Sea crude for November dipped 60 cents to $107.77.

Gold cost $1,330.77 at 1101 GMT compared with $1,340.86 on Monday.

In other markets:

-- Taipei added 0.16 percent, or 13.15 points, to 8,187.02.

Taiwan Semiconductor Manufacturing Co was up 1.0 percent at Tw$101.5 while Hon Hai Precision was 0.53 percent lower at Tw$75.5.

-- Wellington rose 0.16 percent, or 7.49 points, to 4,743.87.

Telecom was down 1.08 percent at NZ$2.30, Warehouse Group added 0.27 percent to NZ$3.67 and Air New Zealand was 1.65 percent lower at NZ$1.49.

-- Manila edged up 0.10 percent, or 6.04 points, to 6,197.84.

Manila Electric Co was up 3.15 percent at 295 pesos and Metropolitan Bank and Trust added 1.20 percent to 84 pesos. San Miguel rose 0.80 percent to 75.40 pesos.

-- Kuala Lumpur ended flat, inching up 0.41 points to 1,769.03.

SapuraKencana Petroleum gained 3.3 percent to 3.81 ringgit and Axiata Group rose 0.2 percent to 6.89 ringgit.

-- Singapore closed up 0.43 percent, or 13.63 points, at 3,181.50.

Singapore Telecom rose 1.34 percent to Sg$3.78 while DBS Bank gained 0.06 percent to Sg$16.43.

-- Jakarta ended up 0.69 percent, or 29.72 points, at 4,345.90.

Lender Bank Negara Indonesia rose 4.29 percent to 4,250 rupiah, while tin miner Timah fell 2.48 percent to 1,570 rupiah.

-- Bangkok gained 1.81 percent, or 25.03 points, to 1,408.19.

Oil company PTT added 1.27 percent to 320.00 baht, while Siam Commercial Bank jumped 4.05 percent to 154.00 baht.

-- Mumbai climbed 0.71 percent, or 137.38 points, to 19,517.15.

Pharma company Wockhardt fell 5.00 percent at 496.30 rupees while Tata Communications gained 7.66 percent at 202.50 rupees.