Asian Stocks Waver as Investors Seek Shelter in Dollars and Yen

Asian stocks declined as investors gravitated towards safe-haven assets like the dollar and yen, ahead of key U.S. economic data releases. The forthcoming U.S. ISM manufacturing survey and jobs data will be crucial in determining the magnitude of the Federal Reserve's upcoming interest rate cut. Treasury yields saw a minor increase, while profits in China’s banking sector took a hit.

Asian stocks declined on Tuesday as investors sought safety in the dollar and yen, ahead of pivotal U.S. economic data that may influence the Federal Reserve's upcoming interest rate decision. The U.S. ISM manufacturing survey and jobs report due later this week will be critical factors.

Ten-year Treasury yields marginally increased to 3.915%, and two-year yields hovered at 3.931% as trade resumed in Asia, following a U.S. holiday. The MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5%, impacted by falling profits in China's banking sector. Japan's Nikkei dropped 0.3%, while S&P 500 futures eased 0.2%.

The yen appreciated by 0.5% to 146.24 per dollar, reflecting a cautious sentiment regarding the Fed's potential rate cut. Market strategists suggest that much hinges on upcoming data, particularly the non-farm payrolls report due on Friday. Economists predict an ISM survey improvement, but non-farm payrolls could shape the final rate cut decision.

(With inputs from agencies.)