Asian Stocks crept higher on Tuesday as Japanese stocks rebounded and Chinese money rates eased, while the U.S. dollar got a fillip from a report the Federal Reserve would again trim its bond buying next week.
The dollar broke the early lethargy with a hop to 104.48 yen when the Wall Street Journal reported the Fed is on track to trim its bond-buying program for the second time in six weeks, paring back by $10 billion to $65 billion a month.
It was enough to nudge 10-year U.S. Treasury yields up a couple of basis points to 2.84 percent, following the U.S. market holiday on Monday.
The drop in the yen helped Japan's Nikkei bounce 1.1 percent, and dragged up markets from South Korea to Taiwan. MSCI's broadest index of Asia-Pacific shares outside Japan swung round to be 0.36 percent firmer.
Investors had a wary eye on Chinese money markets after the People's Bank of China(PBOC) announced a surprise injection of funds on Monday aimed at curbing a recent spike in rates.
Traders on Tuesday said the central bank intended to add 255 billion yuan ($42.13 billion) to the money markets, the largest single-day injection since February 2013.
The move dragged the 7-day bond repurchase rate down to 5.25 percent, from 6.60 percent on Monday.
Dealers assume the authorities were attempting to avoid a repeat of the severe cash crunch that roiled markets in June.
Likewise, investors will be watching liquidity operations by the European Central Bank later Tuesday to see if it acts to correct a recent sharp rise in money rates, a tightening of conditions that could threaten the region's recovery.
The euro edged back a touch to $1.3542, not far from Monday's two-month trough of $1.3508.
Attention will also be on Turkey's central bank as a crumbling currency piles pressure on for a hike in interest rates at its policy meeting on Tuesday.
The lira has hit a string of record lows while the cost of insuring Turkish debt spiked to 18-month highs as a government corruption scandal undermined investor confidence.
In commodity markets, gold steadied at $1,251.49 an ounce, after hitting its highest level since mid-December at $1,259.85 on Monday.
U.S. crude futures slipped below $94 a barrel in early Asian trade on Tuesday as supply worries eased after world powers and Iran took another step to end a decade-long dispute over Tehran's nuclear programme.
Brent Crude oil for March delivery eased 2 cents to $106.33 a barrel, while U.S. crude fell 47 cents to $93.90.
Source: reuters
