Japan's stocks soar while the rest of Asia sags

Asian stock markets on the whole were dragging early Tuesday morning, but Japan's Nikkei rose to a fresh seven-year peak.

Asian stocks dipped in early trade on Tuesday with disappointing Chinese data and a Wall Street slip dampening the mood, although Japan bucked the trend and rose sharply on follow-through momentum generated by the Bank of Japan's surprise monetary easing last week.

The dollar was firmly on the front foot, hovering at multi-year highs against the yen and euro, after the BOJ's easing on Friday added pressure on the European Central Bank to follow suit.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.15 percent. Wall Street closed on slight losses on Monday, taking a breather from a recent rally.

Tokyo's Nikkei was up 3 percent after touching a fresh seven-year high, boosted by the yen's continuing weakness. Japanese financial markets were closed on Monday for a public holiday.

The dollar traded at 113.75 yen after touching a seven-year peak of 114.21 and nearing a December 2007 peak of 114.66.

"Investors who missed the initial move are positioning themselves for the next lurch higher," said Raiko Shareef, currency strategist at Bank of New Zealand.

The euro fetched $1.2490, within reach of a two-year trough of $1.2390 hit overnight.

Commodity currencies also struggled against the dollar on persistent worries about slowing economic growth in China, where data on Monday showed manufacturing activity hit a five-month low.

The weak Chinese data, coupled with downbeat euro zone manufacturing PMI numbers, highlighted the contrast in fortunes between the much of the world and the United States, which showed an unexpected acceleration in manufacturing activity in October.

The Australian dollar traded near a three-week low of $0.8678 hit overnight with focus on the Reserve Bank of Australia's interest rate decision later in the session. The RBA is widely expected to leave rates steady at 2.5 percent.

In commodities, crude oil extended losses after tumbling as much as $2 a barrel overnight after Saudi Arabia deepened price cuts for U.S. customers.

U.S. crude fell 51 cents to $78.27.

Lower oil prices in turn weighed on gold, which was also hurt by the dollar's ongoing rally. Spot gold traded at $1.164.51 an ounce, within striking distance of a four-year low of $1,161.70 hit last week.

(Additional reporting by Ian Chua in Sydney)