Asian stock markets were broadly higher early Tuesday, with Japanese equities leading as solid U.S. manufacturing data helped weaken the yen.

The Nikkei Stock Average was up 0.8%, Korea's Kospi rose 0.7% and Singapore's FTSE Straits Times Index gained 0.2%. Chinese markets are shut for the week. Hong Kong's Hang Seng Index, however, reversed early gains and was down 0.2%.

"We're up based on a weaker yen," said Alex Furber, senior client services executive at CMC Markets. "We've had some fairly positive data on the U.S. side last night, and [some market players believe] this is a case for a rate hike."

The U.S. September purchasing managers' index -- a key measure of factory activity—jumped to 51.5, shifting back into expansionary territory, following a surprise dip to 49.4 in August.

The stronger manufacturing numbers sent the yen down 0.5% against the dollar, as the market's appetite for risk returned. Japanese exporters benefited, with Honda Motor rising 2.2%, Olympus adding 4.1% and Panasonic gaining 1.6%.

The data further supported expectations for an interest-rate increase by the U.S. Federal Reserve at its December meeting. According to CME Group's Fedwatch tool, the market expects a 62.1% probability of a change in rates, which was higher than the previous day.

Elsewhere in Japan, financial stocks rebounded following a recent selloff due to concerns about slow growth, low interest rates and the contagion from a troubled European banking sector. The Topix banking subsector added 2.1%, while among individual banks, Mitsubishi UFJ Financial Group gained 2.3% higher and Sumitomo Mitsui Financial Group rose 2%.

In Australia, stocks were retreating from five-week highs ahead of the Reserve Bank of Australia's decision on interest rates later Tuesday, the first under new governor Philip Lowe. The S&P/ASX 200 was last down 0.2%, while in New Zealand, the NZX-50 index was off 0.4%.

Financial stocks in Australia consolidated after gains in the previous session. Commonwealth Bank of Australia was 0.4% lower and Westpac Banking Corporation was down 0.3%.

Meanwhile, commodities prices were mostly lower, as a stronger dollar made the dollar-denominated products more expensive to buy for those holding other currencies. Brent crude was down 0.6% at $50.60 a barrel, while gold was down 0.1% at $1,310.92 a troy ounce.

Among other currencies, the British pound was relatively stable against the dollar in Asian trade, off 0.1% recently, after declining 1.1% Monday. The sterling's decline came after U.K. Prime Minister Theresa May announced she would trigger Article 50 by the end of March 2017, formally starting the clock on the country's two-year deadline to exit from the European Union.

Kosaku Narioka and Kenan Machado contributed to this article.

Write to Ese Erheriene at ese.erheriene@wsj.com

 

(END) Dow Jones Newswires

October 03, 2016 23:35 ET (03:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Commonwealth Bank Of Aus... (ASX:CBA)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Commonwealth Bank Of Aus... Charts.
Commonwealth Bank Of Aus... (ASX:CBA)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Commonwealth Bank Of Aus... Charts.