Asian shares rose Tuesday on hopes that euro zone officials will act to corral Greece's debt woes and prevent another full-blown banking crisis, but the euro failed to hold on to all its gains.

After three sessions of wild swings on commodities markets, oil and copper rose, but gold fell further to stand about $300 below the record of more than $1,920 an ounce it scaled in early September.

Turbulence on global markets since late July has been driven by investors' twin fears of renewed recession in the United States, and the chaos that Europe's sovereign debt crisis could inflict on the financial system if it continues unchecked.

European Central Bank policymakers said Monday that officials were working to increase the firepower of the region's rescue fund in their latest effort to staunch a crisis that U.S. President Barack Obama said was scaring the world.

U.S. markets reacted positively, finishing more than 2 percent higher on Monday <.DJI> <.SPX>, and the mood continued in Asia, where Tokyo's Nikkei <.N225> rose 1.6 percent, coming off its lowest close in more than two years. <.N> <.T>

MSCI's broadest index of Asia Pacific shares outside Japan <.MIAPJ0000PUS> rose 1.5 percent, after plumbing its lowest levels in 16 months on Monday.

While senior ECB officials confirmed the 440 billion euro rescue fund would likely be increased in size, there were also hints from policymakers that the central bank could cut interest rates next month, reversing a hike earlier this year in a move already expected by markets.

Markets are getting more confident around some action plan in Europe, which is positive, but on the other side, markets are also looking for more policy easing from the ECB, which is negative, said Greg Gibbs, currency strategist at RBS in Sydney.

The combination of both will leave the euro caught in the middle somewhere.

The single currency traded around $1.3485, down about 0.4 percent on the day, after rallying from an eight-month low of $1.3360 on Monday.

On commodities markets, Brent crude oil rose 0.6 percent to $104.55 a barrel and U.S. crude gained 0.9 percent to $80.95.

Copper, which ended Monday up 2 percent after falling more than 6 percent at one stage, rose 1.2 percent on Tuesday to $7,356 a tonne.

Gold, which has been hammered in recent days by selling by hedge funds to cover losses elsewhere in portfolios, slipped 0.4 percent to around $1,620 an ounce.

(Additional reporting by Cecile Lefort in Sydney; Editing by Daniel Magnowski)