Recent US data and the Federal Reserve's dovish turn kept lifting Asian stocks early on Tuesday, while the dollar held the upper hand against its rivals.

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Japan's Nikkei rose 0.4 percent before erasing gains while MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.3 percent.

Australian shares jumped 1.95 percent, with long-battered financials surging on short-covering after a special government-appointed inquiry excoriated Australia's financial sector for misconduct but left the structure of the country's powerful banks in place.

Elsewhere in Asia, trade was light, with markets in greater China, South Korea, Singapore and Indonesia are all closed for the Lunar New Year.

On Wall Street, the S&P 500 gained, with technology and industrials the biggest risers as investors braced for another big week of fourth-quarter corporate earnings reports.

After the bell, Google operator Alphabet fell about 3 percent as its higher spending in the fourth-quarter worried investors even as its revenue and profits beat Wall Street's expectations.

MSCI's gauge of stocks across the globe reached a two-month high, having risen more than 13 percent from its near two-year low late in December, helped by the Fed's change of tack.

Chairman Jerome Powell has signalled its three-year tightening drive may be coming to an end amid a suddenly cloudy outlook for the U.S. economy due to global growth concerns and the US-China trade dispute.

Data announced on Friday showed US job growth surged in January while a key gauge of US manufacturing sector showed surprising resilience after December's shocking fall, allaying fears of immediate slowdown in the US economy.

Hiroshi Nakamura, senior manager of investment planning at Mitsui Life Insurance, said financial markets' positive reaction to the U.S. data is diminishing with time, but hopes for a US-China trade deal "will continue to support markets until the two sides come to formal decisions".

The US dollar strengthened across the board, as investors took heart from Friday's strong payrolls number.

The dollar's index against six major currencies rose to 95.843, having gained 0.27 percent on Monday.

The euro eased to $1.1436, off three-week high of $1.15405 set on Thursday.

The dollar firmed to 109.92 yen, having risen to 110.165 the previous day, its highest level in five weeks.

The British pound slipped to $1.3035, having quickly erased brief gains on Monday following a newspaper report that goods shipped to Britain from the European Union could be waved through without checks in the event of a "no-deal" Brexit.

The Australian dollar fell 0.4 percent to $0.7196 after local retail sales and trade data reinforced concerns about a slowing growth in Australia.

At a meeting on Tuesday, the Reserve Bank of Australia is expected to keep interest rates on hold, though some market players now expect a cut later this year due to mounting signs of economic weakness.

Oil prices were supported by OPEC-led supply cuts and US sanctions against Venezuela.

US West Texas Intermediate (WTI) crude futures rose 0.4 to $54.76 a barrel. They hit 2 1/2-month high of $55.75 on Monday.

First Published:Feb 5, 2019 6:47 AM IST