(Corrects dollar's high against the yen in second paragraph)
By Lisa Twaronite
TOKYO (Reuters) - The dollar ascended to a new 12-1/2-year peak against the yen on Tuesday, while Asian shares fell for a second day as the stronger greenback pressured commodity prices.
The dollar rose as high as 125.07 yen, its loftiest peak since late 2002, before retracing to stand at 124.67 yen, down about 0.1 percent on the day, after a spate of mostly upbeat U.S. data reinforced expectations that the Federal Reserve would raise interest rates this year
"The rise in the dollar against the yen has been steep but sentiment favours testing new highs rather than consolidating," said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.
MSCI's broadest index of Asia-Pacific shares outside Japan was down about 0.9 percent, falling for the second day and touching its lowest intraday level since April 3, while Japan's Nikkei stock index erased earlier gains and slipped 0.1 percent.
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Australian shares skidded about 1.1 percent, pressured by weaker commodities.
The Reserve Bank of Australia kept rates on hold at a record low of 2.0 percent at its latest policy meeting on Tuesday as expected.
On Wall Street on Monday, U.S. stocks began the month with modest gains after the data. Consumer spending remained flat in April, but construction spending and manufacturing gained momentum, backing the view that the U.S. central bank is on track to begin to hike rates later this year.
The economic reports helped U.S. Treasury yields rise to one-week highs, giving the greenback a lift.
In Asian trading on Tuesday, the yield on benchmark 10-year notes stood at 2.188 percent, not far from the U.S. close of 2.192 percent on Monday.
Boston Fed President Eric Rosengren, who is not a voting member of the Federal Open Market Committee, said on Monday he would like to begin raising rates as soon as possible, but also noted risks from the slowdown in China and Europe and the fact that U.S. growth is still not strong enough.
Market participants awaited Friday's U.S. nonfarm payrolls report for a further gauge of the strength of employment conditions. The report is expected to show 225,000 jobs created in May, according to a Reuters poll of economists.
Uncertainty about the outcome of Greece's financial negotiations continued to weigh on the euro, which was nearly flat on the day at $1.0928.
An index tracking the dollar against a basket of six rival currencies was also close to flat on the day, at 97.402.
The leaders of Germany, France, the International Monetary Fund, the European Central Bank and the European Commission agreed at a meeting late on Monday to stay in close contact in the coming days to work on Greek debt negotiations, as Athens and its lenders struggled to reach deal that would prevent the country from defaulting on its debt.
Greece is due to make a 300-million-euro ($327.93 million) repayment to the IMF on Friday.
The common currency was also pressured by business surveys that showed European manufacturing activity remained even more sluggish than its plodding global counterparts.
The Australian dollar gained after the Reserve Bank of Australia's policy statment did not give the explicit easing bias that the market was looking for.
The Aussie rose to $0.7650, from $0.7625 before the data to show a gain of around half a cent on the day. It touched a seven-week trough just below 76 cents on Monday.
The bleak global factory outlook combined with the firmer dollar to hit prices of dollar-denominated commodities.
Copper slipped 0.1 percent to $6,016 a tonne, not far from a six-week low of $5,985 hit on Monday.
U.S. crude oil futures plunged more than 1 percent at one point on Monday but pared their losses ahead of the close, and were steady on the day in Asian trading at $60.20 a barrel. Brent crude futures edged down about 0.1 percent to $64.79.
(Additional reporting by Shinichi Saoshiro in Tokyo; Editing by Kim Coghill)