[HONG KONG] Asian markets mostly rose on Tuesday after the previous day's broad sell-off, while the dollar dipped against most peers but traders remain on edge over Donald Trump's plans for global trade agreements.

While shares in developed economies have rallied and safe-haven sovereign debt prices have fallen, many trading floors in Asia have taken a hit the past two days over worries Mr Trump will throw up tariffs to the world's biggest economy.

His plans for huge spending and tax cuts at home have also fanned expectations the Federal Reserve will hike interest rates more sharply than initially planned, sending the dollar soaring and fuelling an exodus from emerging markets.

However, after a two-day retreat on most regional bourses, there was a tentative recovery with Hong Kong 0.6 per cent higher, Manila up one percent, Jakarta 0.3 percent higher and Seoul 0.1 per cent stronger.

Singapore put on 0.4 per cent and Wellington 0.3 per cent.

However, Tokyo eased 0.2 per cent by the break, having surged more than eight percent to a nine-month high since Thursday on the back of a rally in the dollar against the yen.

Shanghai was flat and Sydney shed 0.6 per cent.

"Risks are elevated, and we are expecting further increases in volatility as markets attempt to second-guess the policies that might eventually come out from the US," Michael McCarthy, chief market strategist at CMC Markets in Sydney, told Bloomberg News.

"One of the challenges for markets is that all of these moves are not straightforward in terms of impact. In a lot of cases, we just have to see how things play out." The dollar dipped back from a five-month high of 108.54 yen, but traders suggested it could test the 110 yen mark as soon as this week, with eyes on Fed chief Janet Yellen's congressional testimony later this week.

The central bank is widely expected to hike borrowing costs next month but her remarks Thursday will be pored over for clues about its plans for next year.

"By all accounts, there appears no stopping the US dollar's recent ascent based on the current interest rate trajectory," Stephen Innes, senior trader at OANDA, said in a note.

"With the Trump Factor fully subscribed, will Dr Yellen spoil the (dollar's) recent coronation as King of the Hill, or be the catalyst for another leg higher when she delivers her economic outlook before the Joint Economic Committee of Congress on Thursday?"

The dollar sank against higher-yielding currencies, with the South Korean won, Australian dollar, Thai baht and New Zealand dollar all up. And the euro rose after hitting an 11-month low of $1.0709 Monday.

And Mexico's peso was more than one percent higher, having hit record lows this week on worries about Trump's warning he will tear up a trade deal with the country and send back millions of migrants.

However, China weakened its yuan fix to the dollar to an eight-year low.

Bets on a sharper rise in US rates have sent bond yields soaring in the US and Australia as traders shift out of them because sovereign debt usually offers lower rates of interest. Prices and yields move inversely from each other. Australian debt yields are at their highest since April, according to Bloomberg News.

AFP