Asian stocks slide from opening highs, investors focus on US-Iran talks

Asian markets opened higher but declined sharply thereafter.

South Korea's Kospi index was down 1.6%, while Japan's Nikkei index was trading flat.

Overnight, Wall Street indices ended higher, where a rally in chipmakers drove the S&P 500 up 1.2% and the Nasdaq 100 nearly twice as much on Monday.

Meanwhile, the yen traded around 161.93 a dollar early Tuesday after depreciating to 161.98 versus the greenback in New York trading. The currency’s slide to the weakest level since 1986 will generate unease in Japan and put traders on high alert for authorities wading into the market.

In the US, the stock resurgence has defied skeptics, coming in the face of war, an oil supply shock and inflation jitters. Since bottoming three months ago, the S&P 500 has staged one of the swiftest rebounds this century, gaining 20% from its March 30 low to its June 2 peak — something it has done just three other times since 2000.

Investors now turn their focus to the US-Iran talks Tuesday and US June jobs data on Thursday that may offer clues on whether the Federal Reserve will keep interest rates higher for longer.

Elsewhere, American crude held its advance before expected US-Iran talks in Doha. The commodity traded around $70.15 a barrel. Gold was little changed around $4,015 an ounce. The dollar slipped, and US Treasury yields were little changed during the New York session.

Attention in Asia will be on the yen. While the weaker Japanese currency has boosted exporters’ profits and helped propel the country’s stocks to record highs, it has also raised import costs, squeezed households and added to political pressure on Prime Minister Sanae Takaichi’s government.

The Bank of Japan lifted its benchmark interest rate on June 16 to 1%, the highest since 1995. Yet the impact was minimal, as traders expect the Fed to stay hawkish going forward.

With inputs from Bloomberg