Investing.com-- Most Asian stocks moved in a flat-to-low range on Tuesday as investors remained on edge over the Iran-Israel conflict, especially after U.S. President Donald Trump called for the evacuation of Tehran.
Focus was also squarely on a Bank of Japan interest rate decision due later in the day, with the central bank expected to leave interest rates and monetary policy unchanged. Japanese stocks saw some strength before the decision.
Regional markets largely brushed off a strong overnight lead-in from Wall Street, where U.S. benchmarks rebounded from Friday’s losses on strength in technology shares.
But S&P 500 Futures fell 0.6% in Asian trade, especially after Trump warned that Tehran should be evacuated, ramping up concerns over U.S. involvement in the conflict.
White House officials clarified that the U.S. was not planning to directly involve itself in the conflict, and that attempts at brokering a ceasefire were underway. But strikes between Israel and Iran showed few signs of stopping, as the renewed conflict entered a fifth consecutive day.
U.S. markets are also expected to be skittish before a Federal Reserve interest rate decision on Wednesday.
Japan stocks upbeat ahead of BOJ
Japan’s Nikkei 225 and TOPIX indexes added 0.5% and 0.2%, respectively, on some gains in local tech stocks. Mild weakness in the yen also supported export stocks.
Japanese markets were focused squarely on the conclusion of the BOJ’s meeting later in the day, where the central bank is widely expected to keep interest rates unchanged at 0.5%.
But investors were on guard over potentially hawkish signals from Governor Kazuo Ueda, given recent signs of steadily increasing Japanese inflation and some resilience in the economy.
The BOJ is widely expected to hike interest rates in July, especially if inflation continues to trend higher.
Asian markets rangebound; geopolitics, c.bank uncertainty weigh
Broader Asian markets moved in a flat-to-low range, seeing little relief from persistent geopolitical uncertainty. Anticipation of a barrage of central bank meetings this week also kept markets on edge.
Beyond the Fed and the BOJ, the Swiss National Bank, the Bank of England, and the People’s Bank of China are all set to decide on interest rates this week.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell about 0.3% each, while Hong Kong’s Hang Seng index shed 0.4%.
Recent Chinese economic data read largely mixed for May, although ING analysts said the economy was on track to grow at least 5% in the first half of 2025.
Australia’s ASX 200 fell 0.1%, while South Korea’s KOSPI added 0.5% on strength in tech shares. The KOSPI has been on a tear since early-June on expectations of more political stability in the country.
Singapore’s Straits Times index added 0.4% even as data showed the island state’s key non-oil exports unexpectedly shrank in May, slashing its trade surplus in half.
Gift Nifty 50 Futures for India’s Nifty 50 index fell 0.1%, pointing to some weakness in the Nifty after a 0.9% rally in the prior session.
