Asian shares climbed for a third session on Tuesday, led by tech stocks, while the Australian dollar slipped on uncertainty about the pace of future interest rate hikes.
Major European stocks <.FTEU3> were expected to open little changed, according to financial bookmakers, with weaker commodity prices hurting resources shares and preventing markets from following through on a higher Wall Street close.
The euro eased against the U.S. dollar, with dealers unconvinced that Greece's fiscal crisis was close to being resolved without an aid package from the European Union.
Doubts about Greece's resolve to tackle its massive debt have grown ahead of the country's second sovereign bond sale this year, which is due later this month.
Fears about the ability of a handful of European countries to finance their growing borrowing have kept a lid on riskier assets so far this year, even though the global economic recovery generally appears to be on track.
It is a deep-seated problem, Kimihiko Tomita, head of foreign exchange at State Street Global Markets in Tokyo, said about Greece's commitment to cutting its debt.
It is an example of how hard it can be to regain trust once you lose it, he said.
Lower volatility in financial markets and upbeat comments from SanDisk
Japan's Nikkei share average <.N225> finished 0.5 percent higher. Strength in the tech sector won an edge over weakness in Astellas Pharma Inc <4503.T>, which dropped 2.1 percent after launching a $3.5 billion hostile offer for U.S. firm OSI Pharmaceuticals
The MSCI index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> rose 0.6 percent, with the information technology sector in clear command of the day, up 1.6 percent.
After plunging 14 percent in the month to Feb 8 on worries about the strength of the global recovery and Greece, the index has retraced nearly half its losses, with international fund managers slowly rebuilding their exposure to the region.
But clearly risks remain.
Hong Kong's Hang Seng index <.HSI>, a favorite among foreign investors for its exposure to China, fell 0.8 percent, led by a 6.9 percent drop in HSBC's <0005.HK> stock after Europe's biggest bank posted disappointing 2009 results.
UNCERTAINTY DOWN UNDER
In currency markets, the Australian dollar slipped 0.2 percent to US$0.8990 despite a rate hike by the Reserve Bank of Australia and signals of more to come amid a surprisingly strong recovery.
This was the fourth rate increase in five RBA policy meetings, putting Australia far ahead of most other rich nations where growth is tepid and rates are at 1 percent or less.
Few market watchers think the RBA is done raising rates, but the pace may not be as furious as it was in the latter part of 2009.
The tightening bias is still intact, though the timing of future rate hikes is debatable. I think they are likely to stay on the sidelines until June, after they have the latest inflation numbers and the budget in May, said Su-lin Ong, senior economist with RBC Capital Markets in Sydney.
The 100-day moving average, currently at $0.9067, capped a small rebound in the Australian dollar last month and stands as a near-term obstacle.
The euro slipped 0.1 percent to $1.3535, about a cent above 9-month lows plumbed in February, while the U.S. dollar index <.DXY> rose 0.5 percent against a basket of major currencies <.DXY>.
Sterling dipped 0.4 percent to $1.4931 and was seen likely to stay weak after tumbling to a 10-month low the previous day, hurt by worries that a UK election due in months could give neither the opposition Conservatives nor the ruling Labour Party a parliamentary majority.
Copper retreated from five-week highs hit in the previous session as concerns over supply from Chile eased after mines there reopened following a massive weekend earthquake.
Shanghai copper futures slid nearly 2 percent and London prices dropped more than 1 percent, dragging the rest of the base metals complex lower, as investors focused on the slow recovery in global demand, highlighted by bulging stocks of the industrial metal.
Oil eased 0.2 percent to $78.57 a barrel, with the dollar strengthening on European sovereign risk worries and forecasts for rising U.S. crude and gasoline inventories capping prices.
(Additional reporting by Masayuki Kitano in TOKYO)
(Editing by Kim Coghill)