Asian markets mostly fell on Tuesday following losses on Wall Street after a better-than-expected US manufacturing report raised the possibility the Federal Reserve will begin winding down its stimulus this month.

Japanese shares bucked the downward trend as the yen slipped against the dollar and moved closer to the four-and-a-half-year high touched in May.

Tokyo rose 0.66%, Sydney eased 0.35%, Seoul was off 0.65%, Hong Kong slipped 0.79% and Shanghai was 0.48% lower.

In the United States, the Institute for Supply Management (ISM) said Monday that activity at the country's factories grew at a much faster rate in November than in October.

The ISM said its purchasing managers index rose to 57.3 last month from 56.4 in October and against expectations of a slight fall. The index is up 7.1 points since the beginning of the year.

A figure above 50 indicates growth while anything below points to contraction.

The news raised the prospect the Fed will start to cut back its US$85 billion a month bond-buying programme this month as the economy shows signs of improving, said Kathy Lien, a managing director at BK Asset Management.

The dollar could gain further strength from a strong jobs report on Friday, or if "leading indicators for (the jobs report) point to a stronger number", Lien said.

On Wall Street the three main indexes fell on the news, while profit-takers also moved in on the first full day of trading after Thursday's Thanksgiving holiday. Dow fell 0.48% and the S&P 500 dipped 0.27% -- after last week notching up new record highs.

The Nasdaq, which last week broke the 1,800 point level for the first time in 13 years, lost 0.36%.

The dollar bought 103.10 yen compared with 102.94 yen in New York afternoon and well up from the levels around 102.50 yen in Tokyo earlier Monday. The greenback is heading towards the 103.70 yen seen in May, which was its highest peak since mid-2009.

The euro bought $1.3534 and 139.50 yen Tuesday against $1.3538 and 139.36 yen in US trade.

On oil markets New York's main contract, West Texas Intermediate for January delivery, was up 25 cents at US$94.07 in morning Asian trade while Brent North Sea crude for January added two cents to US$111.47.

Gold fetched US$1,220.98 per ounce at 0210 GMT compared with US$1,237.43 on Monday.