The biggest eyesore is the more than 1% plunge in Japan's Nikkei share average, but closer inspection shows that more than half of that is from a handful of chip- and AI-related shares with big weightings. Japanese markets were closed on Monday for a national holiday, so are only now catching up on the TSMC news.

The other key theme remains China's ailing economy, with the property market at the epicentre. Trading was volatile, with Hong Kong's property share subindex, for example, swinging from an early 1.7% loss to be slightly up by lunchtime.

There were some hopeful signs, as embattled Chinese developer Country Garden won approval from creditors to extend repayment on an onshore bond, according to sources - the last in a batch it was seeking extensions for.

Peer Sunac China Holdings got creditor approval for its $9 billion offshore debt restructuring plan, the first green light of a debt overhaul by a major Chinese developer.

Those developments didn't help Australia's mining heavyweights from sagging amid the deteriorating demand outlook, dragging down the local stock benchmark

All the drama has disturbed what was meant to be a quiet run-up to a string of central bank policy decisions this week, starting with China's setting of the loan price rate tomorrow, which will be followed the same day by the Federal Reserve's outcome.

Thursday is packed, with the Bank of England, Swiss National Bank, Riksbank, and Norges Bank. Friday brings a closely watched Bank of Japan announcement, following central bank boss Kazuo Ueda's sudden hawkish tilt in a Yomiuri newspaper interview this month, where he seemed to suggest an end to negative rates could come this year.

Certainly FX and rates markets are taking notice of the calendar, with the dollar and Treasury yields content to trade in tight ranges just below recent highs.

Key developments that could influence markets on Tuesday:

-Euro-area HICP final (Aug)

-US housing starts (Aug)

-US 20y Treasury bond auction

(Reporting by Kevin Buckland; Editing by Shri Navaratnam)