Asian Shares Mixed as US-Iran Diplomacy Hits Fresh Hurdle
Asian share markets began the new quarter in cautious fashion as renewed uncertainty over US-Iran diplomacy weighed on sentiment and bond yields remained under pressure.
Tehran said it would not meet directly with US negotiators who had travelled to the Middle East, with the two sides still divided over the framework for easing tensions and restoring reliable passage through the Strait of Hormuz.
The dispute kept attention on energy markets, although crude prices remained relatively contained after recent volatility.
Bond markets were also under pressure after US Treasury yields rose overnight, reflecting concerns that the Federal Reserve may need to raise interest rates if inflation risks persist.
Fed Chair Kevin Warsh is due to appear later at the European Central Bank’s annual conference in Sintra, Portugal, where investors will be looking for clues on the direction of US monetary policy.
Equity investors are also looking ahead to the coming earnings season, hoping corporate results will be strong enough to offset the risk of higher borrowing costs.
Japan’s Nikkei rose 0.8%, extending gains after a strong second quarter. South Korea’s main index slipped 0.9%, despite a powerful recent rally driven by demand for artificial intelligence-related semiconductor stocks.
South Korea’s export data underlined the strength of that trend. Exports surged in June, helped by a sharp rise in semiconductor shipments, as the country became one of only a handful of economies to record monthly exports above $100 billion.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.2%, while Chinese blue-chip stocks gained 0.3%.
US markets ended higher on Tuesday. The S&P 500 rose 0.8%, the Dow Jones Industrial Average added 0.3%, and the Nasdaq Composite climbed 1.5%.
