SINGAPORE (Reuters) -Japanese shares led Asia higher on Tuesday with the yen on the back foot, ahead of a slew of data this week, including on U.S. inflation, which will help investors gauge the Federal Reserve's policy outlook after volatile markets last week.

Oil prices eased after a 3% jump on Monday as investors kept a wary eye on the risk of a widening conflict in the Middle East that could pinch global crude supplies. Demand for safe-haven assets lifted gold, although they slipped a bit on Tuesday. [GOL/]

Japan's Nikkei rose more than 3% following a holiday on Monday, a welcome relief after last week's wild swings that began with a massive sell-off spurred by a rising yen and fears of a U.S. recession. [.T]

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.15% to 556.55. Chinese stocks edged down while Hong Kong's Hang Seng Index ticked up 0.1%.

European stock markets were due for a higher open, with the Eurostoxx 50 futures up 0.3% and FTSE futures 0.26% higher.

"While aftershocks might reveal vulnerabilities, we continue to view recent volatility as being an equivalent of a 'heart palpitation' not a 'cardiac arrest'," Viktor Shvets, head of global desk strategy at Macquarie Capital said in a note.

"We also maintain that the nervousness about a U.S .slowdown is overdone."

However, investor sentiment remains fragile. The yen dropped 0.34% to 147.72 per dollar on Tuesday, having touched a seven-month high of 141.675 on Monday last week, a far cry from the 38-year lows of 161.96 it was rooted to at the start of July.

A Bank of Japan rate rise last month following bouts of intervention from Tokyo earlier in July wrong-footed investors and led them to bail out of popular carry trades, which use the currency of a low-rate market to fund investments with higher returns.

The latest weekly data to Aug. 6 showed that leveraged funds - typically hedge funds and various types of money managers - closed their positions in the yen at the quickest rate since March 2011.

Given the yen's recent rally, dollar-yen is now more in sync with its yield differential, according to Karsten Junius, chief economist at Bank J. Safra Sarasin.

"Another wave of the yen-funded carry trade unwind will likely push the yen still somewhat higher towards year-end. Yet we do not expect USD-JPY to fall meaningfully below 140."

DATA HEAVY WEEK

Data this week will help sharpen views on the Federal Reserve's next moves. Markets are evenly split between a 25 basis-point cut or a 50-bp cut at the next meeting in September.

Traders are pricing in 100 bps of cuts this year.

Surprisingly soft payrolls data stoked U.S. recession worries and kicked off the market meltdown at the start of last week. But strong U.S. data helped allay fears of a global slowdown, and stocks recovered by the end of the week.

U.S. producer price data for July is due later on Tuesday. The figures could feed through to the core personal consumption (PCE) measure favoured by the Fed.

Any hints from the PPI of soft inflationary pressures could cause financial markets to double down on wagers the Fed will sharply cut rates this year, which would weigh on the dollar, said Kristina Clifton, a senior economist at Commonwealth Bank of Australia. 

On Wednesday, U.S. consumer price index data for July is due and is expected to show that month-on-month inflation ticked up to 0.2%. Retail sales data is scheduled for Thursday.

The dollar index, which measures the U.S. currency against six rivals, was 0.04% higher at 103.12. The euro was steady at $1.0940, while sterling was up 0.1% at $1.2778.

In commodities, Brent crude futures eased 0.67% to $81.75 a barrel, while U.S. West Texas Intermediate crude futures slipped to $79.59 a barrel, down 0.59%. Brent had gained more than 3% on Monday, while U.S. crude futures had risen more than 4%. [O/R]