Asian stocks sag on downbeat China manufacturing data

Tokyo's Nikkei bucks the trend, dollar close to highs, US crude struggles near 2-1/2 year lows

Asian stocks dipped on Tuesday with latest signs of slower growth in China and the Euro Zone dampening the mood, although Japan bucked the trend and rose to new seven-year highs on follow-through momentum generated by the Bank of Japan's surprise stimulus move last week.

The dollar took a breather following its big surge but still remained near multi-year highs against the yen and euro after the BOJ's shock move raised expectations the ECB will eventually have to adopt quantitative easing, even if not at its meeting on Thursday.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 per cent.

Tokyo's Nikkei was up 3.4 per cent 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 edged down 0.4 per cent to 113.635 yen on profit taking after touching a seven-year peak of 114.21.

"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 was up 0.3 per cent at $1.2517 after falling to a two-year trough of $1.2390 overnight.

Repercussions from the yen's broad depreciation were felt in South Korea, where exporters extended losses on worries that a softer Japanese currency would erode their price competitiveness relative to their Japanese rivals. South Korean shares were down 0.9 percent.

The Australian dollar inched up as the dollar gave back some ground against its peers, but the A$ still remained within reach of four-year lows on persistent worries about slowing economic growth in major export partner 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 was up 0.3 per cent at $0.8713 after getting close to $0.8642, a four-year trough reached last month. The Aussie showed muted reaction to the Reserve Bank of Australia's widely anticipated decision to leave rates unchanged 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. Concerns about Chinese and euro zone growth remain bearish themes for the commodity.

US crude fell 44 cents to $78.34 a barrel, and a break below $78.08 would take it to its lowest since June 2012.

Lower oil prices in turn weighed on gold, which was also hurt by the dollar's ongoing rally. Spot gold traded at $1,167.60 an ounce, in striking distance of a four-year low of $1,161.70 hit last week.