Japan's Nikkei index closed 6 percent Tuesday, as exporters gained on the yen's recent weakness, though other markets were down after reports pointed to a shriveling U.S. economy ahead of the presidential election.
The elimination of uncertainty surrounding the election could provide a short-term boost to the dollar and equities though the longer-term impact on investor sentiment, especially with regard to rescue policies shaped only in the last several weeks, was unclear.
Meanwhile, economic data in Europe and the United States indicated the strong likelihood both have slipped into recessions, keeping oil prices trading below $64 a barrel and pushing up gold prices.
The euro edged down 0.2 percent from late U.S. trade to $1.2624. The dollar slipped 0.2 percent to 98.97 yen after rising as high as 99.36 yen in early Asian trade on trading platform EBS.
The Nikkei 225 Average climbed 6.3 percent to its highest close in two weeks as Toyota Motor and other exporters gained, with electronics maker Panasonic climbing after sources said it was planning to take over Sanyo Electric. Shares of big Japanese banks such as Mitsubishi UFJ Financial Group and Mizuho Financial Group advanced after Credit Suisse raised its stance on the sector to "overweight", saying that all bad earnings news is likely out after a series of profit warnings last week..
Australian shares cut early losses to end a touch lower, down 0.2 percent, after the country's central bank cut interest rates by more than expectedto cushion a slowing economy. Rate-sensitive sectors such as banks and retailers rose on expectations of more cuts as global central banks take remedial action to save the world economy from a prolonged slowdown sparked by the credit crisis. National Australia Bank and Westpac Banking both closed higher.
South Korea's KOSPI ended 2 percent higher, led by bank and construction shares including KB Financial Group that were helped by economic stimulus measures, but exporters closed lower.
The KOSPI rose for four consecutive sessions making 19 percent since October 29.
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Hong Kong stocks closed nearly flat in volatile trade, as investors took to the sidelines ahead of the U.S. presidential election, but CNOOC shares slid on the back of lower oil prices. Investors are keenly watching the outcome of the election to help determine the outlook for the world's largest economy and the biggest market for oil, electronic goods, automobiles and other exports from Asia, Europe and the Middle East.
Singapore's Straits Times Index dropped more than 2 percent with Singapore Telecommunications leading the decline. Southeast Asia's largest telecommunications company said that the launch of iPhone 3G would hurt its earnings in the fiscal second quarter ended September.
China's Shanghai Composite Index was lower, led by brokerages and banks on concerns over further worsening corporate earnings amid global economic slowdown.