Asian equity markets opened lower on Tuesday, with the Nikkei 225 dropping 1.6% to 68,098.54, the Kospi slipping 0.6% to 6,933.60, and the Hang Seng and Shanghai Composite each losing about 0.5%. The decline came as rising crude prices and inflation worries dampened investor sentiment, even as recent earnings reports from Japanese and other Asian companies showed solid performance.
Oil price surge adds pressure
Benchmark U.S. crude rose 34 cents to $84.84 a barrel in early Asian trading, while Brent crude climbed 21 cents to $91.08 a barrel. The price increase reflects renewed concerns about the war in Iran and its potential to disrupt global oil flow. Higher oil costs have pushed Treasury yields higher, with the 10‑year yield climbing to 4.72% from 4.68% on Friday, a level not seen before the Iran conflict.
Strong earnings provide a counterbalance
Analysts noted that robust earnings from Asian firms, mirroring strong results in the United States, are helping to offset some of the market anxiety. Masashi Akutsu and Tetsuhiro Tokuyama of BofA Securities highlighted that artificial‑intelligence investment has broadened the beneficiary base across sectors such as semiconductor equipment, power gear, machinery, electronic components and materials. The analysts also pointed to solid earnings from Japanese companies for the April‑June quarter, suggesting that the Bank of Japan may consider raising interest rates in the coming months, similar to the U.S. Federal Reserve.
U.S. market context
On Wall Street, the S&P 500 fell 0.5% but remains near its all‑time high, while the Dow Jones Industrial Average dropped 272 points (0.5%) and the Nasdaq slipped 0.3%. The broader market decline was reinforced by the oil price rally, which raised borrowing costs and added inflationary pressure.
Currency movements
The U.S. dollar edged higher against the Japanese yen, reaching 159.43 yen from 159.37 the previous day. The euro ticked up slightly to $1.1585 from $1.1581.
Outlook
Investors will continue to monitor the evolving situation in the Persian Gulf, oil price volatility, and the potential for higher interest rates both in the United States and Japan. While earnings strength offers some support, the combination of higher energy costs and inflation concerns remains a headwind for Asian equity markets.
Original reporting: Alexandria, VA News – WTOP News — read the source article.
