TOKYO: Asian stocks crept up on Tuesday as investors took solace from data showing the Chinese economy grew slightly more than expected in the third quarter, calming fears of a deepening slowdown in the world's second-largest economy.
China's economy grew 7.3 percent between July and September from a year earlier, slightly above expectations. But it slowed from 7.5 percent in the second quarter, the weakest in nearly six years.
"By and large, [it was] an impressive reading showing resilience of the Chinese economy. It also shows that we don't need to be that concerned about the depth of slow down in China," said Dariusz Kowalczyk at Credit Agricole Corporate and Investment Bank in Hong Kong.
Other data showed factory output rose 8.0 percent in September from a year earlier, beating expectations for a 7.5 percent increase and up from August's six-year low of 6.9 percent. However, fixed asset investment and retail sales figures were weaker than expected, suggesting that Beijing still has reason to announce a fresh round of economic support measures.
MSCI's broadest index of Asia-Pacific shares outside Japan rose about 0.3 percent in morning trade following the Chinese figures, after opening flat.
Japan's Nikkei stock average, though, extended losses throughout the morning as the yen strengthened and investors locked in profits after the previous session's rally.
The Nikkei slipped about 0.5 percent after surging 4 percent on Monday, its biggest rise since June 2013, buoyed by the global rebound as well as news that Japan's $1.2 trillion public pension fund was likely to more than double its allocation to domestic stocks.
Wall Street marked solid gains overnight despite a quarterly earnings miss from IBM, and Apple Inc posted a better-than-expected 12 percent jump in revenue after the close.
Early on Monday, Dallas Federal Reserve President Richard Fisher told CNBC television that last week's turbulent trading should not stop the Fed from ending its third round of quantitative easing.
The consensus view is that the Fed will decide to wrap up its bond purchases for QE3 later this month, at its Oct 28-29 policy meeting, while short-term interest rates futures implied markets do not expect the US central bank to raise rates until late 2015.
Those expectations, combined with fears about the Ebola virus and fighting in the Middle East, have kept benchmark Treasury yields not far above 2 percent, and capped the dollar's gains.
The yield on benchmark 10-year notes slipped to 2.175 percent in Asian trade, compared to Monday's US close of 2.183 percent.
The dollar fell about 0.1 percent against the yen to 106.81 yen, while the euro was steady at $1.2795.
The Australian dollar, often seen as a liquid proxy of China's growth prospects given Australia's large trade exposure to the Asian giant, jumped a quarter of a US cent after the Chinese growth data.
The Aussie rose as high as $0.8815, from $0.8773 before the figures, and was last up about 0.2 percent at $0.8796.
In commodities trading, spot gold stood at $1,246.24 an ounce, close to its overnight levels and bolstered by renewed physical demand related to Diwali, India's major bullion-buying event this week.
Brent crept up about 0.1 percent to $85.50 a barrel.
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