TOKYO: An index of Asian shares fell on Wednesday as copper prices tumbled and another bomb scare in Europe hurt risk appetites, while bets that the Federal Reserve remains on track for a rate hike bolstered the dollar.

The greenback edged higher, close to seven-month highs against a basket of currenciesas U.S. economic data also backed the case that the U.S. central bank is poised to increase interest rates next month for the first time in nearly a decade.

The dollar's strength undermined dollar-denominated commodities, making them more expensive for holders of other currencies.

Copper continued to suffer, shedding 1.5 percent to $4,612.50 a tonne CMCU3 after hitting a 6-1/2-year low of $4,590 overnight, amid fears of waning demand from China.

"It's doom and gloom here, the biggest bears are the Chinese, the general view is that little will improve next year," said a fund source in Shanghai, which is hosting the year's biggest copper industry meeting in Asia this week.

Shanghai shares dropped 0.4 percent early but then changed course and were slightly up after data showing Chinese home prices rose for first time in over a year in October on an annual basis. That signalled a housing market stabilisation that could help re-energise the listless economy.

On Tuesday, Wall Street shares ceded earlier gains to end almost flat after news that German authorities called off a football game which German Chancellor Angel Merkel was due to attend, citing threats of bombing, sparking fears of another attack coming only days after the deadly assault in Paris.

"Coming less than a week after the incident in Paris, it would be a natural reaction, even though consensus seems to be growing earlier that the impact of the terror attack would be limited," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

"Markets are likely to be going back and forth for now," he added. Media reports that separate Air France flights to Paris from the United States were diverted as a security precaution also weighed on sentiment.