Asian stock markets were mixed on Tuesday as investors braced for three days of earnings releases from large-cap tech stocks on Wall Street, starting with Google parent Alphabet later in the day.
The dollar drifted close to a three-month high with one of the Federal Reserve's favorite employment indicators – the JOLTS job openings report – due Tuesday, ahead of highly anticipated monthly employment data. non-farm jobs Friday. U.S. Treasury bond yields have moved away from their highest level in three months.
The yen regained its footing after plunging to a three-month low on Monday as the coalition government's defeat in weekend elections clouded the outlook for Japan's fiscal and monetary policies. The Nikkei index rallied after a cautious start to consolidate gains from the previous session.
The US elections have entered their home stretch, with polls still too close to name a winner, even if some betting sites and financial markets are leaning in favor of a victory for Republican Donald Trump over Democrat Kamala Harris.
Crude oil rose slightly after Monday's plunge on signs the war in the Middle East would not expand, after Israel avoided targeting oil and nuclear facilities in a retaliatory strike on Iran in weekend course.
The Nikkei rose 0.65% at 0213 GMT, building on its 1.82% rally in the previous session. It started the day down 0.21%.
Hong Kong's Hang Seng was up 0.65%, limiting previous gains of 1.6%. Star stocks from mainland China fell 0.1%, giving up an initial rise of 0.68%.
US S&P 500 futures were flat after the index gained 0.26% overnight.
“The conviction to drive these markets up, we just don't have it,” said Tony Sycamore, market analyst at IG. “We're in a very, very delicate time. It just doesn't make sense to chase risk right now.”
Most of the “Magnificent Seven,” the group of tech mega-caps that have propelled Wall Street to all-time highs this year, report financial results this week, starting with Alphabet. Results from Meta Platforms and Microsoft are expected on Wednesday, followed by those from Apple and Amazon on Thursday.
The dollar was little changed against a basket of six major currencies, including the yen and the euro. The dollar index settled at 104.24, after reaching 104.57 overnight, matching last week's Wednesday high, a level not seen since July 30.
Recent strong U.S. economic data, including evidence of a resilient jobs market, has helped reduce bets on Federal Reserve easing this year, boosting the dollar.
The US currency was also supported by growing market expectations of an election victory for Trump, whose tariff, tax and immigration policies are considered inflationary, therefore negative for bonds and positive for the dollar.
Ten-year US Treasury bond yields fell to 4.272% on Tuesday, after hitting their highest level since July 11, at 4.3%, overnight.
The dollar fell 0.24% to 152.92 yen, after reaching its highest level since July 31 on Monday at 153.885 yen.
In Japan, a period of struggling to secure a coalition is likely after Prime Minister Shigeru Ishiba's Liberal Democratic Party and his junior partner Komeito lost their majority in parliament, in a scathing result that could mean bigger tax spending and complicate the Bank of Japan's efforts to normalize interest rates.
The leader of the opposition People's Democratic Party said on Tuesday that the central bank should avoid making significant changes to its ultra-free monetary policy because real wage growth is still stalled.
The BOJ will decide its policy on Thursday, and no changes are expected.
The euro remained stable at $1.0814, and the pound sterling remained stable at $1.2973.
Gold rose 0.35% to $2,751.76 an ounce, closing in on last week's record high of $2,758.37.
Brent oil futures gained 0.6% to $71.86 a barrel, while West Texas Intermediate oil was at $67.83 a barrel, up 0.7%. Both contracts fell 6% on Monday, hitting their lowest level since October 1.
