Asian stocks got a tentative boost on Tuesday from U.S. President Barack Obama's compromise deal to extend all Bush-era tax cuts, while the euro ticked up but remained vulnerable to debt-related pressure.

Leading European shares <.FTEU3> rose 0.2 percent in early trade, though investors were wary of the possibility of an imminent Chinese interest rate rise, possibly as early as this weekend.[nTOE6B602F]

Stock markets in Hong Kong <.HSI>, Shanghai <.SSEC> and South Korea <.KS11> closed higher, and MSCI's gauge of Asian stocks excluding Japan <.MIAPJ0000PUS> rose 0.5 percent, taking its gains for the year to more than 12 percent versus 7.5 percent for the MSCI world index.

Today's market is driven largely by expectations of more quantitative easing measures by the United States, said Shinhan Investment Corp analyst Lee Sun-yeb in Seoul.

After meeting Democratic leaders at the White House on Monday, Obama announced a framework agreement with Republicans that would renew tax cuts not just for the middle class -- as he and fellow Democrats had sought -- but also for wealthier Americans, as Republicans wanted.

Extending all the tax cuts for two years would cost $501 billion, according to the congressional budget office, adding that renewing the rates will boost the economy in the short term, but be harmful in the long term.

Asia has been one of the chief beneficiaries of flows of capital from the United States, where the Federal Reserve is pursuing a policy of printing more cash.

In Japan, the benchmark Nikkei average <.N225> was dragged down by the strength of the yen, and a Reuters poll showed the mood among Japanese manufacturers darkened in late November and is expected to grow even gloomier in the coming months as a strong yen and the global slowdown eat into profits.

The impact of a strong yen, slowing exports and declines in profits weighed on corporate sentiment and companies are growing more cautious about the outlook, said Yoshimasa Maruyama, an analyst at Itochu Corp.

The Nikkei closed 0.26 percent lower, though Sumitomo Corp <8053.T> and Mitsubishi Corp <8058.T> outperformed the broader index on reports they are making moves to expand their rare earths businesses. Non-Chinese sources of the hi-tech minerals are much in demand, on worries the world's biggest supplier may in future restrict exports.

But adding to the generally cautious tone in Asian financial markets was the belief that the cost of borrowing in China will soon rise.

China's central bank may raise rates again this weekend as it tries to contain inflationary pressures, official newspaper the China Securities Journal reported on Tuesday.

Another newspaper said Chinese bank lending had exceeded by the end of November the government's full-year loan target of 7.5 trillion yuan ($1.13 trillion), supporting arguments in favor of further credit tightening.

DEBT WORRIES DOG EURO, BOOST GOLD

The euro slipped in early trade before recovering to

$1.3320, just above its late levels in New York on Monday, with support seen at $1.3268.

The next major market event will be the outcome of the Irish budget, due later on Tuesday, traders said. The deeply unpopular government is set to unveil a record austerity plan that will inflict more pain on voters.

If the (Irish) parliament fails to approve proposals, we could see a fresh flare-up in euro zone tensions and the euro could fall sharply against major forex counterparts, said David Rodriguez, strategist at DailyFX.

Ireland last month received an 85 billion euro bailout from the International Monetary Fund and European Union, and markets are wondering if Portugal and Spain will be the next ones in need of rescue.

Euro zone finance ministers met on Monday amid pressure to increase the size of a 750 billion euro safety net for debt-stricken members, but Germany rejected such a move and also dismissed a call for joint euro bonds guaranteed by all governments.

U.S. consumer confidence data for October was due for release at 1500 GMT.

Gold traded at $1,420 per ounce, down slightly from the previous session's $1,427. This is the most recent in a series of peaks the precious metal has reached as investors buy heavily, attracted by gold's perceived safety as a store of value, in contrast to paper currencies. It has risen almost one-third since the start of the year.

Gold priced in euros hit an all-time high of 1,073.03 euros on Tuesday, driven by persistent worries about unsustainably high debt levels within the single currency zone.

U.S. crude oil futures slipped from the 26-month high it touched in the previous session, trading around $88.80 on Tuesday, while benchmark industrial metal copper, which has moved closer in recent sessions to its record high of almost $9,000 per ton, changed hands for just below $8,800.

(Additional reporting by Ian Chua in Sydney and Izumi Nakagawa in Tokyo; Editing by Miral Fahmy)