Most Asian markets on Tuesday built on the previous day's rally after a broadly positive lead from Europe and Wall Street, while traders look ahead to the start of US earnings.

Dealers remain upbeat after Friday's surprisingly strong US jobs data that analysts said has put the Federal Reserve on course for at least one more interest rate hike this year, boosting the dollar.

Eyes will now turn to Fed boss Janet Yellen's congressional testimony this week for a better handle on the bank's plans for rates as well as winding down its other stimulus put in place during the financial crisis.

However, the key catalysts for business this week will be the beginning of the corporate report season, with big-name firms including JP Morgan, PepsiCo and Citigroup in line.

"Looking ahead, we think improving corporate earnings are the key ingredient needed to sustain the equity bull market," said Bob Doll, senior portfolio manager and chief equity strategist at Nuveen Asset Management LLC.

"And with economic growth prospects looking solid, we think earnings can climb," he told Bloomberg News.

On Asian equity markets Tokyo ended 0.6 percent higher while Hong Kong surged 1.5 percent and Sydney put on 0.1 percent.

Seoul added 0.6 percent, with Taipei more than one percent up and Wellington 0.6 percent higher. However, Shanghai eased 0.3 percent and Singapore gave up 0.6 percent.

Bets that US borrowing costs will rise further continue to underpin the dollar, which held gains against the pound and euro.

- Oil volatility -

However, while it pushed up against the yen, it has struggled to break out, despite the widening gap between US and Japanese monetary policy.

Stephen Innes, senior trader at OANDA, said in a note: "By all accounts with the Bank of Japan and Fed divergence still on the cards, (the dollar) should be trading higher."

But he said that ongoing geopolitical fears following North Korea's missile test last week and questions about Japanese Prime Minister Shinzo Abe's future after recent scandals and an election setback "are weighing on Japanese investors as a drive for downside protection enters the psyche".

He added: "It appears these fears are tempering USDJPY upside despite the Fed maintaining its tightening conviction, and BoJ (keeping) its easing bias."

Oil prices edged up for a second day after last week's losses, supported by an expected drop in US stockpiles but there are warnings of uncertainty owing to heavy production by the US and other countries not signed up to the OPEC-Russia cuts.

"The market is likely to see continuing volatility," David Lennox, a Sydney-based resource analyst at Fat Prophets, said.

"There is still a glut and there is potential for further weakness. Investors need to see good seasonal demand from the US, otherwise there will be pressure to the downside."

In early European trade London and Paris each edged up 0.1 percent while Frankfurt tacked on 0.3 percent.

- Key figures around 0820 GMT -

Tokyo - Nikkei 225: UP 0.6 percent at 20,195.48 (close)

Hong Kong - Hang Seng: UP 1.5 percent at 25,877.64 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,203.04 (close)

London - FTSE 100: UP 0.1 percent at 7,375.56

Euro/dollar: DOWN at $1.1390 from $1.1399 at 2045 GMT

Pound/dollar: DOWN at $1.2878 from $1.2879

Dollar/yen: UP at 114.50 from 114.07 yen

Oil - West Texas Intermediate: UP 26 cents at $44.66 per barrel

Oil - Brent North Sea: UP 25 cents at $47.13

New York - DOW: FLAT at 21,408.52 (close)

source: AFP