Asian shares struggled for traction on Tuesday, despite gains on Wall Street, but Japan's Nikkei touched a 9-month high as hopes of a sustained economic recovery for the rich world encouraged investors to switch funds from emerging to developed markets.

The euro drifted back from a two-week low plumbed after surprising weak German industrial orders data, but fading expectations of a near-term eurozone interest rate rise stopped the single currency pushing higher.

Merger activity drove U.S. stocks to two-and-half year highs on Monday, when the Dow Jones industrial average <.DJI> and broader S&P 500 <.SPX> both rose 0.6 percent. <.N>

Market players in Tokyo said better-than-expected earnings reports from U.S. and Japanese companies have accelerated a shift of money out of inflation-dogged emerging markets and into developed markets with loose monetary policies. <.T>

Retail investors, encouraged by foreigners who are moving into the Japanese market, are now aggressively adding peripheral stocks and those that posted strong earnings, said Mitsushige Akino, a fund manager at Ichiyoshi Investment Management.

The Nikkei <.N225> rose 0.3 percent, but MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was flat, with markets in Hong Kong, Seoul and Singapore in negative territory.

Australian shares rose 0.3 percent as positive earnings from National Australia Bank lifted the top four lenders, but shares in investment bank Macquarie fell 1 percent after it lowered its full-year profit guidance.

Shares in National Australia Bank, the country's top lender, gained 2.4 percent on the back of a forecast-beating 18 percent rise in first-quarter cash profit.

Every time they come out with a result that says basic operations have done reasonably well and conditions are all tracking in the right direction, you get a steady decrease in the perceptions of risk that go with NAB, said Angus Gluskie, chief investment officer at White Funds Management.


The euro was steady around $1.3590, having fallen to $1.3508 on Monday. Some traders were wary of more buying by Asian central banks, which had helped push the single currency higher in the previous session.

The euro has retreated from a 12-week high at $1.3862 since European Central Bank President Jean-Claude Trichet last week doused expectations of an imminent interest rate rise, saying inflation in the eurozone would remain contained.

I think the euro will be supported, but it will need a dose of hawkishness from the European Central Bank to rise, said Koji Fukaya, chief FX strategist at Credit Suisse in Tokyo.

The dollar was steady against the yen around 82.30, capped by selling by Japanese exporters at 82.50 yen and above.

U.S. crude oil futures were barely moved at $87.46 a barrel, as concerns about unrest in Egypt affecting global supplies eased and investors turned their attention to rising U.S. inventories.

Gold was also little changed around $1,350.60 an ounce, under pressure from rising global stock markets that encouraged investors to switch funds from the safe haven metal into riskier assets.

(Editing by Miral Fahmy)