HONG KONG: Asian markets were mostly higher on Tuesday as Wall Street provided a positive lead following upbeat US data before a closely watched Federal Reserve meeting.

The dollar eased against the yen but remained up from Monday's levels in Asia, as investors wait to see whether the Fed will announce a cut in its massive stimulus programme after a two-day meeting.

Tokyo rose 0.83 per cent, or 125.72 points, to 15,278.63, Sydney closed up 0.27 per cent, or 13.6 points, at 5,103.2 and Seoul ended 0.23 per cent, or 4.59 points, higher at 1,965.74.

But Hong Kong lost 0.20 per cent, or 45.43 points, to end at 23,069.23 and Shanghai fell 0.45 per cent, or 9.78 points, to 2,151.08.

Global markets have mostly fallen over the past week as investors speculate about the future of the Fed's $85 billion a month bond-buying programme, which has helped fuel an equities rally since it was unveiled in September last year.

But as the US central bank prepares for a two-day meeting starting Tuesday, investors in most markets picked up cheap stocks after another set of positive US figures showing industrial output surged a solid 1.1 per cent in November.

Also Monday, preliminary data indicated US manufacturing expanded for a fourth consecutive month in December.

On Wall Street the Dow rose 0.82 per cent, the S&P 500 gained 0.63 per cent and the Nasdaq picked up 0.71 per cent.

Markit Economics also said business activity in the 17-nation eurozone ticked up in December, although there was still weakness in France.

Market-watchers said traders had priced in any reduction in the US stimulus following upbeat data, including on unemployment and economic growth, as well as the expected passage of a bipartisan budget deal through Congress that will avert another government shutdown.

“Over the past week or so, the implied probability of 'tapering' by the Fed has increased. The US budget deal and better retail sales for November were some of the catalysts for a change in sentiment towards tapering happening at the December (Fed) meeting,” said analysts at Nomura in a research note.

It added that 37 per cent of polled clients expected the move this month, slightly more than those forecasting a January move.

“It has been priced with a very high probability for one of the next three meetings, and it may not matter greatly if the tapering starts in December, or in January or March.”

In the forex market the dollar dipped slightly against the yen bet remained higher than its Monday levels in Tokyo. It had suffered a sell-off Friday after hitting a five-year high of 103.93 yen.

The greenback was at 102.98 yen in afternoon trade, against 103.02 yen late in New York after slipping to 102.62 yen at one point Monday. The euro was quoted at $1.3776 and 141.84 yen against $1.3761 and 141.77 yen.

Oil prices dipped, with New York's main contract, West Texas Intermediate for January delivery, down 28 cents at $97.20 in afternoon trade. Brent North Sea crude for February eased 36 cents to $109.35.

Gold fetched $1,243.50 at 0810 GMT compared with $1,229.05 late Monday.

In other markets:

– Taipei rose 0.47 per cent, or 39.06 points, to 8,352.93. Taiwan Semiconductor Manufacturing Co. rose 1.47 per cent to Tw$103.5 while smartphone maker HTC was 0.34 per cent higher at Tw$145.5.

– Wellington fell 0.16 per cent, or 7.59 points, to 4,728.02. Air New Zealand was down 0.61 per cent at NZ$1.625, Telecom slipped 1.49 per cent to NZ$2.32 while Warehouse Group added 1.66 per cent to NZ$3.68.

– Manila rose two per cent, or 116.45 points, to 5,928.99.