Shares in Japan and China eased on Tuesday as concerns that further Chinese monetary tightening will cool the engine of world economic growth overshadowed Japanese data that pointed to improving demand.
The euro spiked against the dollar, although market players attributed its strength to technical factors in light holiday trade, and oil edged up near a 26-month high as a snow storm in the U.S. northeast underpinned demand expectations.
Data from Japan showed factory output rose for the first time in six months in November and a survey of manufacturers revealed they expected to boost production in the coming months to meet firm demand from the rest of Asia.
Data in recent weeks have been supportive of the stocks and commodity markets globally, said David Cohen, director of Asian economic forecasting at Action Economics.
The U.S. will avoid a double-dip. The Asian region including Japan looks a little bit better, with its industrial production finally showing an increase.
But despite some positive signs on the outlook, investors entering thin year-end trading remained concerned about Chinese monetary policy tightening in the months ahead.
The timing of China's Christmas Day interest rate rise may have surprised but the move itself did not, with Chinese leaders pledged to make fighting inflation a priority in 2011.
World shares mostly fell on Monday in response to the move, as investors fretted that tighter monetary policy would moderate the growth that many are relying on to support the global economic recovery.
On Tuesday, MSCI's broadest index of Asia shares outside Japan, which is up nearly 13 percent for the year, rose 0.1 percent.
But Shanghai shares fell 1 percent, after a 2 percent drop the previous day, and Tokyo's Nikkei shed 0.6 percent.
Investors locked in profits as Shanghai shares fell in late trade yesterday, said Kazuhiro Takahashi, general manager at Daiwa Capital Markets. They didn't want to buy further as uncertainty remained for Chinese shares.
With Australian markets closed for a holiday the main stock gains in Asia were in South Korea, where the benchmark index rose 0.6 percent, led by a 1.7 percent rise for Samsung Electronics.
U.S. stocks finished little moved on Monday, with the Dow Jones industrial average down 0.2 percent but the Nasdaq Composite 0.1 percent firmer.
The euro rose sharply as bears who had been betting on further weakness due to worries about the continent's sovereign debt crisis were forced to abandon their positions.
The beleaguered single currency jumped to around $1.3250 after stop-loss orders were triggered at key chart positions around $1.32, and was later trading at $1.3235.
Essentially the euro is rising on short-covering, said Estuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp in Japan.
I think we'll need to see the market a bit more to see how investors plan to allocate their money after Christmas and in the new year.
The euro has been under pressure due to concerns that more debt-soaked euro zone nations such as Portugal and Spain will be forced to join Greece and Ireland in needing a bailout to finance their burgeoning debt.
Broad weakness in the dollar helped commodities, which are mostly priced in the U.S. currency and so become cheaper for international investors when it falls.
U.S. copper futures rallied more than half a percent to a record high of 430.75 cents per lb and Shanghai copper rose 0.6 percent. Spot gold rose to $1,391.50 an ounce.
Oil rose 14 cents to $91.14 a barrel, as blizzards brought knee-deep snow to the northeastern United States, the world's biggest market for heating oil.
(Editing by Kazunori Takada)