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Hong Kong - Asian markets mostly fell on Tuesday following Wall Street's losses after a better-than-expected US manufacturing report heightened speculation that the Federal Reserve will begin winding down its stimulus this month.
Japanese shares bucked the downward trend as the yen slipped against the dollar, which moved closer to the four-and-a-half-year high touched in May.
Tokyo rose 0.60% to 15 749.66 points, Sydney lost 0.44% to end at 5 256.1 and Seoul fell 1.05% to 2 009.36.
Hong Kong closed 0.53% lower at 23 910.47. But Shanghai added 0.69% to 2 222.67 as bargain-hunters moved in following Monday's losses that were fuelled by an expected return of initial public offerings after a year-long hiatus.
In the United States, the Institute for Supply Management said Monday that factory activity grew at a much faster rate in November than in October.
The institute said its purchasing managers' index rose to 57.3 last month from 56.4 in October, despite expectations of a slight fall. The index is up 7.1 points since the beginning of the year.
A figure above 50 indicates growth while anything below points to contraction.
The news raised the prospect the Fed will start to cut back its $85bn a month bond-buying programme this month as the economy shows signs of improving, said Kathy Lien, a managing director at BK Asset Management.
National Australia Bank said a December Fed taper "is back on the cards, at least for markets".
On Wall Street the three main indexes fell on the news, while profit-takers also moved in on the first full day of trading after Thursday's Thanksgiving holiday.
The Dow fell 0.48% and the S&P 500 dipped 0.27%, after last week notching up new record highs. The Nasdaq lost 0.36% percent.
The dollar bought ¥103.10 compared with ¥102.94 in New York Monday afternoon and ¥102.50 in Tokyo earlier Monday.
The greenback is heading towards the ¥103.70 seen in May, which was its highest point since mid-2009.
The euro bought $1.3551 against $1.3538 while it was also around a five-year high at ¥139.73 compared with ¥139.36 in US trade.
The yen is also facing selling pressure on growing expectations the Japanese central bank will unveil more monetary easing measures to boost the economy.
The Australian dollar slipped to 90.90 US cents after the country's central bank head said the unit was "uncomfortably high" and added that "a lower level of the exchange rate is likely to be needed to achieve balanced growth in the economy".
The comments from Glenn Stevens sparked speculation the bank could intervene in currency markets to push down the value of the "Aussie".
On oil markets New York's main contract, West Texas Intermediate for January delivery, was up 33 cents at $94.15 in afternoon Asian trade. Brent North Sea crude for January rose 16 cents to $111.61.
Gold fetched $1 224.27 per ounce at compared with $1 237.43 on Monday.
In other markets:
- Taipei fell 0.26% to 8 392.55 points.
Taiwan Semiconductor Manufacturing Co. was 0.48% lower at Tw$104.0 while leading chip design house MediaTek gained 1.05% to close at Tw$434.5.
- Wellington fell 0.18% to 4 783.85 points.
Telecom eased 1.1% to NZ$2.28, Air New Zealand was down 0.9% at NZ$1.60 and MetlifeCare was down 3.0% at NZ$4.15.
- Manila fell 0.70% to end at 6 179.50 points.
Metropolitan Bank eased 0.63% to 78.50 pesos, while SM Investments fell 1.75% to 730 pesos.
