* Futures portend opening gains for European bourses
* Crude futures edge down from 2-year highs after Saudi crackdown
* Nikkei reverses early losses, hits near 26-year high
* Uncertainty over U.S. tax reform progress weighs on dollar
By Lisa Twaronite
TOKYO, Nov 7 (Reuters) - Asian shares rallied to their highest in a decade and Japan's Nikkei climbed to its best close since 1992 on Tuesday, while oil prices held most of their gains a day after surging to more than two-year peaks on Saudi Arabia's anti-corruption purge.
Futures hinted at solid openings for European bourses, with European stock futures, Dax futures and FTSE futures and CAC futures each up 0.3 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan extended early gains, rising 0.7 percent to its loftiest peak since November 2007. The index got a bump higher after all three major U.S. equity indexes closed at record highs overnight.
Japan's Nikkei reversed early losses and finished 1.7 percent higher, on expectations of strong earnings from Japanese companies.
"Foreign investors who were underweight on Japanese stocks in the summer are raising their investment stances to neutral and even overweight," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
Australia's S&P/ASX 200 index jumped 1 percent to a nearly 10-year high, bolstered by strong commodities prices.
Australia's central bank held rates at record lows for a 14th straight policy meeting on Tuesday as expected, and signalled it would stay sidelined for months to come amid stubbornly low inflation.
U.S. crude shed 11 cents to $57.24 after breaking above $56 a barrel for the first time in more than two years overnight. Brent crude futures were down 7 cents at $64.20.
in Saudi Arabia, Crown Prince Mohammed bin Salman's clampdown on graft led to arrests of royalty, ministers and investors, including prominent billionaire investor Alwaleed bin Talal.
At present, analysts do not see Saudi Arabia, the world's largest oil exporter, changing its policy of supporting crude prices, but the crackdown has spurred concerns of Middle Eastern money pulling out of global financial markets
"For now, concerns about the Saudi news do not appear to be weighing on U.S. shares, but if they do become a problem in the future, it could eventually have an impact on Japanese shares," Yutaka Miura, a senior technical analyst at Mizuho Securities in Tokyo.
The dollar index, which tracks the greenback against a basket of six major currencies, added 0.1 percent to 94.847 .
Against the yen, the dollar rose 0.4 percent to 114.12 but remained below its eight-month high of 114.737 marked in the previous session.
The euro edged down 0.1 percent to $1.1597.
Lower U.S. yields have also weighed on the dollar, though they rose on Tuesday in line with buoyant equity markets.
The benchmark 10-year yield was at 2.328 percent in Asian trading compared to 2.320 percent, its U.S. close on Monday, when it plumbed its lowest levels in two weeks. It was at a seven-month high of 2.47 percent as recently as late October.
The lack of clarity on the progress of U.S. tax reform as well as leadership at the U.S. central bank has clouded the dollar's outlook and kept it off its recent highs.
Tax negotiators in the U.S. House of Representatives will seek to overcome their differences this week and work on a plan, aiming for their self-imposed deadline of passage this month.
The Federal Reserve confirmed on Monday that influential monetary policymaker William Dudley plans to retire by mid-2018, leaving the leadership of the U.S. central bank unusually open.
Spot gold was down 0.2 percent at $1,278.65 per ounce after gaining nearly one percent in the previous session, easing in line with firmer Asian equities markets.
Additional reporting by Ayai Tomisawa in Tokyo; Editing by Sam Holmes and Richard Borsuk