Asian markets were mixed Tuesday as China took the next, critical step in a long-awaited money management reform, and as the United States gave the Chinese tech company Huawei a slight reprieve in Washington's ongoing trade war with Beijing.

China's Shanghai Composite Index edged up 0.2%, following a 2.1% gain the day before.

Hong Kong's Hang Seng Index slightly retreated in early trading, down 0.2%. The index rallied 2.2% on Monday, its biggest daily gain in two months.

On Tuesday morning the People's Bank of China set its new Loan Prime Rate at 4.25% — slightly lower than its existing benchmark one-year lending rate, which hasn't changed in years. The LPR is a replacement that is meant to better reflect changes in market rates, and make it cheaper and easier for companies to borrow. Analysts have described the measure as effectively a rate cut.

The LPR will be set on the 20th of each month and serve as a new guidance rate for Chinese banks to price their loans to clients.

"While this should nudge banks to reduce lending rates slightly, the impact on economic activity will be marginal," wrote analysts from Capital Economics in a research note Tuesday, adding that unlike a benchmark cut, "it will only feed through to borrowing costs on new loans, not outstanding ones."

The upshot, they added, is that China's central bank "still has work to do."

Asian markets also had a chance to consider news from Washington on Monday that the US government would add more than 45 new businesses associated with Huawei to an export blacklist.

At the same time, the government said it was renewing a temporary license that allows companies in the United States to sell products to Huawei in some cases. The renewal lasts for 90 days and went into effect on Monday.

"While it is not unexpected, the extension for the easing of Huawei sanctions had added to the relief for markets at the start of the week," wrote Jingyi Pan, a market strategist for IG Group, in a research note. She pointed out that US stocks in particular edged higher.

Japan's Nikkei 225 rose 0.4%. South Korea's Kospi was up about 0.4%. Japan has approved shipments of a high-tech material to South Korea for the second time since imposing export restrictions last month, Reuters reported Tuesday.

Australia's S&P/ASX 200 gained 0.7%, extending a 1% rise on Monday. The Australian central bank released on Tuesday the minutes of its policy meeting for August. It showed the policymakers believe it's "reasonable" for interest rates to stay low for an extended period to support economic growth.