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By Alun John and David Henry

 Asian stock markets rose on Tuesday after a record-setting day on Wall Street, while Bitcoin paused for breath after an overnight endorsement from Tesla Inc sent the cryptocurrency up 20%.

Oil also hit 13-month highs, helped by rising optimism about a return in fuel demand.

MSCI's broadest index of Asia-Pacific shares outside Japan was last up 0.32 % at 721.53 after climbing as high as 730.16 late last month.

Korea was an early riser, up 0.92% while Chinese blue chips rose 0.49% and Hong Kong nudged up 0.24%.

Japan's Nikkei .N225 was up 0.36% and e-mini futures for the S&P 500 were up 0.5%.

The early action came after another day of so-called reflation trades around the world, in which global markets bid up stocks, oil and gold while U.S. Treasury yields held near 11-month highs.

"Reflation on the back of U.S. fiscal stimulus and positive vaccine news remains the major theme for markets," strategists at National Australia Bank wrote.

Expectations have been building that inflation would pick up as governments and central banks continue massive spending and easy money policies until officials are certain that their economies will recover from the coronavirus pandemic.

Wall Street reached all-time closing highs on Monday as the Nasdaq Composite added nearly 1% and the S&P 500 and the Dow Jones Industrial Average gained about 0.75%.

In more volatile cryptocurrency markets, Bitcoin briefly passed $47,000 for the first time, a 20% rise, before paring gains. It was last at $45,669.

Tesla Inc said overnight it had invested around $1.5 billion in the virtual currency and expects to accept it as payment for its cars in the future.

Justin d'Anethan, sales manager at digital asset company Diginex, said that so far most of the selling pressure in Asia had been absorbed.

"This morning, after over $1.2billion of leveraged shorts got liquidated, the usual sellers of crypto will probably think twice before dumping their coins," d'Anethan said.

Oil prices continued to rise on Tuesday to 13-month highs.

Brent rose 33 cents, or 0.54%, U.S. West Texas Intermediate crude was at $58.34 a barrel, up 37 cents, or 0.64%.

"There is a sense that the glut of oil supply is disappearing more rapidly than anybody thought possible," said Phil Flynn, senior analyst at Price Futures Group in Chicago. "There seems to be a paradigm shift in the market."

Spot gold rose 0.37% to $1,837 an ounce as expectations of a large U.S. economic stimulus package bolstered its appeal as an inflation hedge.

Such expectations hit the dollar index , which dropped back on Tuesday after tripping at the end of last week on a weaker-than-expected jobs report. It was last down 0.091% at 90.868.

Against the yen, the dollar was down 0.12% at 105.10.

(Reporting by David Henry in New York; Editing by Lisa Shumaker and Gerry Doyle)