Asian markets rebounded on bargain-buying following recent heavy selling caused by the eurozone crisis, but trade would stay volatile as EU leaders send out mixed messages, analysts said.
The region's gains followed rallies in European markets and on Wall Street Monday after reports filtered through that a plan was emerging to stem a crisis that US President Barack Obama said was "scaring the world".
Tokyo was 1.80 percent higher by the break, Hong Kong added 2.22 percent, Sydney jumped 3.05 percent, Seoul was 3.68 percent higher, Shanghai climbed 0.71 percent and Singapore was up 1.40 percent.
But Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities, said: "We've experienced this type of temporary rebound many times before, with markets coming up for air after days of brutal selling, and this will likely again be a short break before we see more evidence of progress in the Greek debt crisis."
Global stocks have slumped over recent weeks as European leaders dither over the best way to tackle its sovereign debt problem while Greece verges on a bankruptcy that many fear could lead to another financial crisis.
Investors moved in to buy cheap shares Tuesday as a report emerged that European officials were actively developing a plan to use funds for the eurozone bailout facility to shore up financially strapped European banks.
There was also talk that a 50-percent "orderly" haircut for Athens' creditors will now be required to make a difference.
Adding to that was speculation that France was drawing up plans to re-capitalise the country's ailing banks amid persistent worries over their exposure to Greece.
The news lifted European and US stocks. On Wall Street the Dow jumped 2.53 percent, the S&P 500 added 2.33 percent and the Nasdaq Composite rose 1.35 percent.
And in Europe London's FTSE-100 gained 0.45 percent, the Paris CAC 40 added 1.75 percent and Frankfurt's DAX was 2.87 percent up.
Germany on Monday shot down moves to boost the 440-billion-euro ($590 billion) European Financial Stability Facility (EFSF) after EU economic affairs commissioner Olli Rehn said it should be given "greater strength."
But within hours, German Finance Minister Wolfgang Schaeuble insisted there was no plan to boost the fund's actual size.
"We are giving it the tools so it can work if necessary," Schaeuble said, referring to the new powers allowing the fund to lend to countries such as Italy even before they hit cashflow crises.
"Then we will use it effectively -- but we do not have the intention of boosting its volume."
His blunt put-down comes as Chancellor Angela Merkel faces a crunch vote on Thursday to ratify the EFSF in the German parliament, which is expected to be tight. Germany is by far the biggest provider to the fund.
Merkel is also due to meet Greek Prime Minister George Papandreou on Tuesday to plan a way forward for the indebted country.
Obama later warned that the debt crisis was getting out of hand in the face of fears of another worldwide recession.
Europe "never fully dealt with all the challenges that their banking system faced," Obama said late Monday.
"It's now being compounded with what's happening in Greece," he added. "So they're going through a financial crisis that is scaring the world."
Chris Gore, currency analyst at GOMarkets in Melbourne, told Dow Jones Newswires: "The general sense of impending doom will likely remain the primary theme as European leaders struggle to build a consensus on the right course of action to avoid a full-scale crisis."
The euro edged up slightly to $1.3556 in early Tokyo trade, from $1.3538 late Monday in New York, and to 103.43 yen from 103.30 yen.
The dollar was down at 76.28 yen against 76.42 yen.
On oil markets New York's main contract, light sweet crude for delivery in November, surged $1.15 to $81.39 per barrel.
Brent North Sea crude for November delivery rose 95 cents to $104.89.
Gold was at $1,645.50 an ounce by 0300 GMT, up from the $1,599.98 it was at by 0800 GMT Monday.