By Shinichi Saoshiro
TOKYO (Reuters) - Asian stocks advanced on Tuesday after a record-setting session on Wall Street on bets that U.S. lawmakers would pass sweeping tax legislation, while the dollar treaded water as traders were circumspect about the bill's economic impact.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.
Australian shares added 0.6 percent, Hong Kong's Hang Seng rose 0.7 percent and Shanghai climbed 0.4 percent.
South Korea's KOSPI lost 0.2 percent and Japan's Nikkei trimmed earlier gains and was last 0.05 percent higher.
Wall Street hit record highs on Monday on growing optimism about lower corporate tax rates as the Republican tax bill moved closer to passage.
Global markets have been buffeted in recent weeks by shifting expectations about President Donald Trump's ability to push through his signature policy.
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The bill would cut U.S. corporate tax rates to 21 percent from 35 percent, which investors are betting will boost profits as well as trigger share buybacks and higher dividend payouts.
"While the markets have already priced in the corporate tax cut for the most part, it does provide an advantage for U.S. corporations," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
"The rising trend in broader equities led by the U.S. markets looks to continue for a while."
The dollar index against a basket of six major currencies was flat at 93.699 after losing 0.25 percent overnight, as some traders questioned the overall economic impact of the tax overhaul.
The dollar was also capped by doubts the tax reforms will be able to drive sizable repatriation of funds back into the United States as expected.
"The bill's plan to cut tax rates on repatriation of foreign profits would be a permanent measure, rather than temporary one. Corporations would therefore not feel rushed to repatriate funds home, meaning less support for the dollar," Ichikawa at Sumitomo Mitsui Asset Management said.
Moreover, while Federal Reserve policymakers expect the U.S. economy to get a short-term lift from the tax reform, they project growth will then ease back to about 2 percent by 2020 and not rise to around 3 percent as Trump and his administration predict.
The euro was steady at $1.1785 after rising 0.3 percent the previous day. The dollar was also little changed at 112.605 yen having pulled back from a high of 112.840 overnight.
In commodities, oil prices were little changed with some of the support from a North Sea pipeline outage lost after a nationwide oil worker strike was called off in Nigeria.
Brent crude futures was down 2 cents at $63.39 per barrel, while U.S. crude futures were 5 cents higher at $57.21.
Spot gold was little changed at $1,260.92 per ounce after climbing 0.5 percent the previous day on the sagging dollar.
Bitcoin was 0.6 percent lower at $18,849 on the Bitstamp exchange.
(Additional reporting by Lisa Twaronite in Tokyo; Editing by Shri Navaratnam)