Asian shares close higher

AAP

Asian markets have risen following another positive lead from Wall Street, while slightly higher than expected Chinese inflation provided some upbeat news about the world's No.2 economy.

Shares were also supported on Tuesday by bargain-hunting after the region suffered a sell-off on Monday on concerns about the future of the US Federal Reserve's stimulus program.

Tokyo rose 2.58 per cent, or 363.56 points, to 14,472.90, while Sydney climbed 1.50 per cent, or 72.2 points, to close at 4,881.7. Seoul ended up 0.37 per cent

Hong Kong climbed 0.46 per cent, or 100.82 points, to 20,683.01 and Shanghai was up 0.37 per cent, or 7.18 points, at 1,965.45.

A generally upbeat mood permeated trade, with Wall Street's three main indices ending higher for a second straight session following another strong round of jobs data. Worries about political instability in Portugal also subsided.

The Dow rose 0.59 per cent, the S&P 500 added 0.53 per cent and the Nasdaq put on 0.16 per cent.

US investors were also looking ahead to the earnings season, hoping for some strong guidance for the second half of the year.

Asia suffered a sell-off on Monday after the US Labor Department said many more jobs were created in June than expected, stoking concerns the Fed would soon start reeling in its monetary easing scheme put in place to boost the economy.

However Michael Hewson, an analyst at CMC Markets UK, said it "appears that markets are coming around to the idea that the idea of tapering may not be such a bad thing".

The upbeat outlook for the US economy has sent the US dollar higher against the yen. The greenback stood at ¥101.22 in afternoon trade, compared with ¥100.99 late on Monday in New York.

The euro bought $US1.2878 and ¥130.36, from $US1.2868 and ¥129.96.

China's National Bureau of Statistics said inflation hit 2.7 per cent in June, up from 2.1 per cent the previous month, and higher than the 2.5 per cent forecast.

While broadly within expectations, the news will be welcomed following a series of data indicating growth in the Asian economic giant is slowing down.

"Caution has been growing that China is slowing down quickly," a Japanese bank dealer told Dow Jones Newswires.

"The data suggesting solid retail sales demand gave some relief."

In Portugal fears of a political crisis ebbed after the coalition government agreed a deal to prevent it falling apart. The alarm was sounded last week when the finance and foreign ministers resigned over Lisbon's austerity drive, put in place to secure a crucial bailout.

Oil prices eased on profit-taking, but continue to be supported by the ongoing violence in Egypt, analysts said.

New York's main contract, West Texas Intermediate (WTI) for delivery in August, fell 12 US cents to $US103.02 a barrel in afternoon trade. Brent North Sea crude for August was down 28 US cents at $US107.15.

Last week saw WTI surge 6.5 per cent while Brent put on 5.0 per cent.

Gold was at $US1,255.20 per ounce at 0810 GMT (1710 AEST), compared with $US1,231.80 late on Monday.