The dollar rose in Asia Tuesday after better-than-expected US manufacturing figures stoked speculation that the Federal Reserve will start tapering its stimulus before year's end.

The greenback fetched 103.07 yen in Tokyo midday trade, up from 102.94 yen on Monday afternoon in New York where it had surged to a six-month high of 103.13 yen.

The euro eased a tad to US$1.3532 from US$1.3538 while it rose to 139.48 yen from 139.36 yen.

The Institute for Supply Management (ISM) said Monday that activity at US factories grew at a much faster rate in November than in October, notching up the sixth-consecutive monthly rise. Forecasts had been for growth to have slowed.

The ISM figures come ahead of a busy week of US economic news culminating with Friday's release of the November non-farm payrolls report.

"A December Fed taper is back on the cards, at least for markets," National Australia Bank (NAB) said.

"While the manufacturing data was very good, retail sales data was not so rosy."

Cautious US shoppers spent about 2.7% less than a year ago during the so-called Black Friday weekend which kicked off the holiday shopping period.

"It seems consumers need a little more time, and an improved labour market, before they are encouraged to spend some more," NAB said.

The employment data is seen as a key marker for dealers trying to get a handle on the state of the world's largest economy. The Fed has said it will only cut back on its vast bond-buying scheme when the economy is strong enough to stand on its own. The central bank's next policy meeting begins on December 17.

Among the other US data due for release this week are third-quarter growth and home sales, while the Fed will also open up its Beige book on regional economies.

And the European Central Bank will hold a policy meeting this week, with investors looking to see if it ushers in any more monetary easing after last month cutting interest rates to a record low of 0.25%.