SINGAPORE - Asian shares slipped from 1-1/2 month highs on Tuesday, while US and Europe futures fell on fading chances for early cuts there.

Japan's Nikkei backed away from its flirtation with the index's 1989 high, closing 0.3 percent lower.

MSCI's index of Asia shares outside Japan slipped 0.1 percent. South Korean shares fell 1 percent.

US Treasury yields ticked up, as cash trade resumed following Monday's US holiday. S&P 500 futures were 0.3 percent lower, as were European futures.

Global markets are smarting a little as traders have sharply scaled back bets on US rate cuts following high readings on producer and consumer prices.

Ten-year US Treasury yields, up 10 basis points last week rose 1 bp in Asia to 4.30 percent. Two-year yields were steady at 4.65 percent. Moves in currency markets were modest though the dollar was strong enough to top 150 yen.

The New Zealand dollar paused a recent climb to steady at $0.6138 as traders weigh the risk of a surprise interest rate hike next week.

Economic indicators are likely to drive the next move, with Canadian inflation and European wages data the next in focus.

"The (European Central Bank) have flagged they are looking for signs of cooling wages before rate cuts are considered," said Corpay currency strategist Peter Dragicevich.

"Continued strength in the ECB wage indicator may see markets push out the potential start date for ECB policy easing, a support for the euro and headwind for the US dollar."

The euro was last a touch weaker at $1.0770.

Buyouts

Deals and earnings were also in the headlines.

Capital One, a US consumer lender, said it will acquire credit card issuer Discover Financial Services in an all-stock transaction valued at $35.3 billion, though prices didn't immediately react with markets closed.

In Australia, ANZ Bank shares fell 2 percent and Suncorp shares rose 6 percent after ANZ's buyout of Suncorp's banking business was cleared by the competition tribunal.

Casino operator Star Entertainment shares fell 20 percent and hit a record low after a second regulatory investigation into the company's Sydney casino was announced.

BHP, the world's biggest listed miner, logged flat half-year profits and shares - dragged by the falling iron ore price - lost 1 percent.

Ahead there will be a wary eye on Nvidia's earnings report on Wednesday as investors discover whether it can beat already lofty expectations.

Commodity markets more broadly were steady in Asia trade with Brent crude futures flat at $83.53 a barrel. Gold held at $2,018 an ounce.

Soft commodities started the week on the back foot with wheat futures dropping to the weakest level in three months on pressure from abundant Black Sea supplies. Short-covering lifted soybean futures to one-week highs.