Japanese stocks lead losses in Asia after U.S. stocks fell

SINGAPORE — Japanese stocks led losses in Asia-Pacific markets on Tuesday after Wall Street slipped overnight.

The Nikkei 225 in Japan declined 1.54% in morning trade, while the Topix index fell 1.36%.

South Korea’s Kospi shed 1.15% and the Kosdaq lost 2.04%.

Hong Kong’s Hang Seng index slid 0.67%, and the Hang Seng Tech index lost 1.12%.

Mainland China markets were mixed at the open after declining on Monday. The Shanghai Composite was just below the flatline, while the Shenzhen Component rose 0.3%.

Australia’s S&P/ASX 200 gained 0.34%

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.63% lower.

Tuesday is quiet on the data front, but investors will look ahead to the upcoming U.S. inflation report and China GDP report later this week. The Bank of Korea will also meet this week.

In company news, Japanese automaker Toyota Motor on Monday said it was extending the suspension of one production line at its Motomachi plant to investigate the cause of a recall for one of its models.

About 4,000 units will be affected by the suspension, and the global production plan will not be changed, the company said. Toyota’s shares were down 1.35%.

In the U.S., major indexes fell ahead of earnings season.

The Dow Jones Industrial Average lost 164.31 points, or 0.52%, to close at 31,173.84. The S&P 500 slipped 1.15% to 3,854.43, and the Nasdaq Composite shed 2.26% to 11,372.60.

Electric vehicle maker Nio’s U.S.-listed shares slid nearly 9% overnight on Covid concerns in China.

The U.S. dollar index, which tracks the greenback against a basket of its peers, broke above 108 and was last at 108.464.

The Japanese yen traded at 137.18 per dollar, after weakening past 137 against the greenback on Monday.

“Markets appeared to view the expansion of Japan’s ruling Liberal Democratic Party majority in the upper house as an endorsement of the BoJ’s ultra-easy monetary policy,” Carol Kong, a senior associate, international economics and currency strategy at Commonwealth Bank, wrote in a Tuesday note.

The Bank of Japan’s commitment to low interest rates is increasingly an anomaly, and has caused the yen to weaken.

The Australian dollar weakened sharply this week, and was last at $0.6731.

“AUD/USD broke below support of 0.6750 amid a stronger USD,” Kong wrote. “Concerns about a sharp global slowdown and fears of more virus restrictions in China will remain weights on AUD in our view,” she added.

Oil futures declined in Asia trade. U.S. West Texas Intermediate crude fell 1.36% to $102.67 per barrel, while international benchmark Brent crude slipped 1.2% to $105.82 per barrel.