Asian stocks rose on Tuesday, looking past weak revenue growth at top U.S. firms and more weak U.S. economic data, as shares of resource firms and banks clawed back some of their recent losses. The Japanese yen hovered near its recent 7-week high against the dollar, amid growing talk of intervention as traders wondered if Tokyo could stomach further yen gains.

The MSCI index of Asia Pacific ex-Japan stocks <.MIAPJ0000PUS> rose 1 percent, led by gains in resources <.MIAPJMT00PUS> and financials <.MIAPJFN00PUS>.

The Nikkei average <.N225> fell as much as 1.7 percent as traders returned from a long weekend and caught up with Monday's losses in the region.

U.S. stocks rose overnight, spurred by optimism ahead of earnings from key tech firms International Business Machines and chip maker Texas Instruments which were released after the closing bell.

But both firms failed to impress as their topline revenue growth disappointed markets, highlighting concerns that the global economic recovery is losing steam.

Investors also faced yet more worrisome data from the United States. On Monday, the National Association of Home Builders/Wells Fargo Housing Market index fell more than expected in July to its lowest level since April 2009 after a popular tax credit for homebuyers expired in April.

U.S. earnings and indicators are increasing concern about a slowdown in the economy, said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

We could definitely see a test of the downside, though not until later in the week.

Despite the disappointing IBM and Texas Instrument results, some tech-dependant Asian markets such as Taiwan and South Korea were marginally higher as the outlook for Asian tech firms remained more upbeat.

The Korea Composite Stock Price Index <.KS11> (KOSPI) was up 0.2 percent after opening lower and Taiwan's main TAIEX share index <.TWII> was up 0.5 percent.

Big tech companies that have a wider customer bases and good product portfolios should still be doing okay in the third quarter, said John Chiu, a vice-president at Fuh Hwa Securities Investment Trust.

JAPAN FRETS OVER YEN

The dollar was marginally higher at 86.74 yen, having hit a seven-month low of 86.25 on Friday, and the euro was steady at $1.2940, having brushed aside Moody's downgrade of Ireland's credit rating on Monday and concerns that negotiations between Hungary and international lenders had broken down.

The dollar was bid up by Japanese importers, but was still within striking distance of a seven-month low versus the yen leading many market players to look to what authorities in Japan would do if the yen climbed to the 85 level.

The market was looking to a press conference by Finance Minister Yoshihiko Noda for clues on Japanese policymakers' pain threshold.

Japan's fragile economic recovery has been largely due to surging exports, offsetting persistently weak domestic demand, and further yen gains threaten to erode its export competitiveness.

Hong Kong's benchmark Hang Seng index <.HSI> was up 1 percent, boosted by banks which rose after China changed rules to allow the sale of yuan-denominated financial products in Hong Kong, giving companies greater access to yuan funding.

Standard Chartered Plc <2888.HK>, which immediately announced it would offer yuan-denominated structured investments to its retail and wholesale clients, rose 1.4 percent and BOC Hong Kong (Holdings) <2388.HK> was up 1.7 percent.

Oil futures rose about 25 cents toward $77 a barrel, supporting shares of energy companies, as forecasts for a fourth consecutive weekly drop in U.S. crude inventories countered fears that a slowdown in the global recovery would curb fuel demand.

(Additional reporting by Elaine Lies in TOKYO and Baker Li in TAIPEI)

(Editing by Kim Coghill)

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