HONG KONG: Asian shares mostly rose Tuesday following a strong lead from Wall Street, while Sydney was lifted by better-than-expected inflation data and Japan raised its growth outlook for the current fiscal year.
However, Shanghai continued to be strained by expectations of policy tightening moves by China to cool its economy and rein in prices.
Tokyo closed 1.15 percent, or 119.31 points, higher at 10,464.42 and Sydney rose 0.46 percent, or 21.8 points, to 4,807.8.
Seoul closed 0.22 percent higher, adding 4.51 points to 2,086.67, while Hong Kong gained 0.48 percent by the break.
The Bank of Japan said on Tuesday it expected Asia's second biggest economy to grow 3.3 percent in the year to March, up from previous forecasts for 2.1 percent growth.
The news gave a further boost to Tokyo's Nikkei, where exporters were already leading gains on the back of a weakening yen.
Earlier Tuesday the Reserve Bank of Australia said the fourth-quarter consumer price index rose 0.4 per cent from the previous three months and was up 2.7 percent over the year.
Economists had expected a 0.7 percent quarter-on-quarter increase and a three percent rise over the 12 months.
"The RBA can sit tight for quite some time," BNP Paribas economist Dominic Bryant told Dow Jones Newswires.
He added that the bank is unlikely to hike rates this year. "There's a lack of underlying price pressures present."
Regional shares were given a lift by a 0.92 percent gain on the Dow in New York, brought about by hopes of strong corporate earnings and as dealers awaited the outcome of a Federal Reserve policy meeting this week.
But Shanghai was 0.64 percent off amid ongoing fears of a rate hike on the mainland after data showed inflation last year was above the government's target.
"We expect the government to raise interest rates in February as January's consumer price index may be higher than November's, which was at a 28-month high of 5.1 percent," said Lu Zhengwei, an economist from Industrial Bank.
On forex markets, the euro hovered at two-month highs as sovereign debt worries eased.
The euro rose to $1.3662 in Tokyo morning trade from $1.3635 in New York late Monday, when the unit hit a two-month high of $1.3686.
The dollar slipped to 82.41 yen from 82.48 while the euro was up at 112.61 yen from 112.53 yen.
The single currency was also given support by comments from European Central Bank chief Jean-Claude Trichet warning against inflation pressures in the eurozone, which fuelled speculation of an interest rate increase.
"Trichet's remarks raised speculation that (the) ECB may raise interest rates," said Akihiro Tanaka, dealer at Resona Bank. "The euro is holding firm as investor appetite remains unabated even after it climbed to the two-month high."
Crude was lower after oil cartel OPEC said it may boost output in line with an expected rise in demand.
New York's main contract, light sweet crude for March delivery, dipped 37 cents to 87.50 dollars per barrel in afternoon trade, and Brent North Sea crude for March was down 24 cents at $96.37.
Growing confidence in the global economic outlook pressed on gold, with the precious metal opening sharply lower in Hong Kong at $1,331.00-$1,332.00 an ounce, well down from Monday's close of $1,348.30-$1,349.30.
In other markets:
-- Taipei rose 0.49 percent, or 43.60 points, to 8,991.39.
Hon Hai rose 0.43 percent to Tw$116.5, while TSMC fell 0.4 percent to Tw$75.0.
-- Manila was 1.48 percent, or 57.59 points, up at 3,960.30.
Budget carrier Cebu Air added 0.1 percent to 93 pesos, conglomerate Ayala Corp rose 1.7 percent to 354 and Manila Electric ended 1.5 percent higher at 276.
-- Wellington ended 0.19 percent, or 6.41 points, higher at 3,359.07.
Fletcher Building added 1.2 percent to NZ$7.90 and Air New Zealand rose 2.1 percent to NZ$1.45 while Telecom was flat at NZ$2.30.
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