Asia stocks waver as yen surges, Iran warns of retaliation

Asian stocks wavered on Tuesday amid a surging yen, mixed regional economic data, and escalating tensions between Iran and the U.S. The Nikkei 225 in Japan saw fluctuations before closing up 0.2%, as the yen climbed 0.6% to 153.51 against the dollar, its highest level since February. MSCI’s Asia-Pacific index outside Japan rose 0.2%, with the KOSPI in South Korea gaining 1.2%. Meanwhile, U.S. futures for S&P 500 e-mini declined 0.1% following a U.S. holiday on Monday.

The dollar index sank to a two-week low of 98.82, while the 10-year U.S. Treasury bond yield edged up 0.6 basis points to 4.788%. However, the outlook for the Federal Reserve’s September meeting remains uncertain, with traders pricing a 60% probability of a 25-basis-point rate hike, similar to the previous week.

Japan’s economy expanded at a faster pace than initially thought in the April-June quarter, driven by business spending, according to revised data. However, the figure still fell short of expectations. Japanese real wages surged 2.4% in July compared to a year ago, marking the highest increase since May 2021. This suggests a stronger case for the Bank of Japan to accelerate its tightening pace.

In Australia, shares dropped 0.6% after consumer sentiment indicators fell sharply in September. Gold prices edged up 0.5% to $4,428.23, while bitcoin and ether showed slight gains of 0.1% and 0.2% respectively.