UPDATE:Asian Shrs Mostly Up;Japan Exporters Up On Easing Yen

SINGAPORE -- Asian shares were mostly higher Tuesday, on the back of Wall Street's gains. Stocks of Japanese automakers and technology companies recouped some of their recent losses as the yen weakened following Monday's rally.

Japan's Nikkei 225 gained 1.0% and South Korea's Kospi Composite rose 0.9%. Australia's S&P/ASX 200 was 1.7% higher and Hong Kong's Hang Seng Index was up 2.0% while Dow Jones Industrial Average futures were 9 points higher in screen trade after rising 1.3% Monday, for its first gain in four sessions.

"There's a lack of fundamental news, so sentiment is getting more important in determining the market's daily direction. And the overnight rebound in the U.S. markets certainly helped improve sentiment today" in Seoul, said J.J. Park at Taurus Investment & Securities.

Chinese markets were trading lower as investors turned cautious before the National Day holidays starting Thursday. Markets will reopen on October 9. "Buying interest has been dismally low lately because investors are in a holiday mood and those who want to buy are refraining from doing so, in case global markets tumble during the hiatus," said Huatai Securities analyst Chen Huiqin. The Shanghai Composite Index was down 0.9%.

Taiwan shares were up 1.9%, Singapore's Straits Times Index rose 1.6% while Malaysia's Kuala Lumpur Composite gained 0.2%. Philippine shares were 0.3% higher, Indonesia shares were up 1.6% and Thailand shares rose 1.1%. New Zealand's NZX-50 was up 0.7%.

Japanese stocks were higher as the U.S. dollar rose to around the Y90 mark, after sharp losses recently. The weaker yen helped exporters recover from Monday's losses with Toyota Motor up 1.1% and Honda Motor up 1.3%.

Still, caution was advised as "today's buying is just short-covering, so (the market's) gains will be limited," said Yumi Nishimura, market analyst at Daiwa Securities SMBC. "The foreign exchange market is going through a correction after the yen strengthened a bit too much against the dollar recently," she says. However, "The market remains cautious about possible further yen strengthening near-term."

Technology stocks were generally higher across the region with Sharp up 0.5% and NEC Electronics up 0.2% in Tokyo, thanks to a weaker yen. In Seoul, Samsung Electronics was up 2.1% and Hynix rose 4.2% on rising DRAM chip prices.

Flat-panel and chip makers in Taiwan led gainers, after an Economic Daily News report quoted the Economic Minister Yen-Shiang Shih as saying the government would gradually allow them to set up more advanced factories in China and acquire Chinese peers. AU Optronics was up 3.1% while Taiwan Semiconductor Manufacturing rose 4.3%.

In Korea, financial stocks rose tracking gains by their U.S. counterparts with KB Financial up 1.5% and Mirae Asset Securities up 1.7%.

Australian stocks set a fresh 11-month high with NAB up 2.1%, Macquarie up 1.5%, BHP Billiton up 2.3% and Origin Energy up 1.6%. "I think it is sustainable," said UBS head of institutional sales George Kanaan. "Every time we get a couple of days of weakness, investors want to buy equities. I think the market will be well supported around here and we will potentially see a break out towards 5,000 later this year. It's still cheap on a mid-cycle basis."

IG Markets analyst Ben Potter said U.S. mergers and acquisition activity was rubbing off on the Australian share market and high cash levels could fuel further gains. He added that a sustained break above 4,750 would point to 4,800 as the next resistance, though traders should wait for a daily close above 4,750.

The New Zealand market was up on Wall Street's cue. "We are firmer on the back of offshore markets having another rebound again. The blue chips, with the exception of Telecom, are trading higher, in particular Fletcher Building," said Hamilton Hindin Greene broker Grant Williamson. "Investors are looking at which stocks are going to benefit most from economic recovery and Fletcher Building is right at the top of the pile," he said.

Fletcher Building was up 1.9% while Telecom slipped 1.1% after the government said it would review funding for the company's delivery of rural services.

In foreign exchange markets, the U.S. dollar was higher against the yen, helped by short-covering from short-term players. Hiroshi Maeba, Senior Dealer at Nomura Securities noted that low U.S. interest rates, repatriation of overseas earnings by Japanese firms before end of fiscal half-year this week could "keep the (dollar's) topside quite heavy."

The dollar was at Y89.97 from Y89.61 in late New York trade, after hitting an eight-month low at Y88.23 on Monday. The euro at Y131.55 from Y130.91 in late New York and $1.4619 from $1.4606.

Japanese government bonds were little changed. "Most market participants will retreat to the sidelines ahead of the semiannual book closing, so we don't expect much to happen in the market," said Mitsubishi UFJ Securities strategist Naomi Hasegawa. "With the dollar-yen recovering and the Nikkei in positive territory, that will cap the upside for the JGB market."

The lead December futures contract was last 0.01 higher at 139.32 points while the 10-year yield was flat at 1.28%.

The London Metals Exchange three-month copper futures contract was down $65 at $5,945 per ton from the London kerb while aluminum was $3 lower at $1,830. Spot gold was trading at $990.60 per troy ounce, up 10 cents from the New York close.

Nymex crude oil futures for November were last 13 cents higher at $66.97 on Globex.