Nikkei 225 edged up 0.2 per cent after plunging almost 2 per cent on Monday following hawkish signals from the BOJ

Most Asian stock markets edged higher on Tuesday, while Japanese stocks struggled amid signals the Bank of Japan may raise interest rates.

KOSPI climbed 1.5 per cent, outperforming its peers after the U.S. confirmed that the general tariff rate on imports from South Korea, including autos, would drop to 15 per cent retroactive to November 1.

The move was seen as a boost for export-driven South Korean firms, lifting sentiment and helping push the index higher.

Australia’s S&P/ASX 200 ticked up 0.1 per cent, while Straits Times Index added 0.2 per cent.

Bucking the trend, China’s blue chip Shanghai Shenzhen CSI 300 and the Shanghai Composite index dropped 0.6 per cent each. Hong Kong’s HSI traded flat.

Nifty 50 opened largely muted on Tuesday.

Nikkei 225 edged up 0.2 per cent after plunging almost 2 per cent on Monday following hawkish signals from the BOJ.

Gains were also limited as markets also took cues from a weak finish on U.S. stock market overnight. U.S. stock index futures were largely muted in Asia hours on Tuesday.

Investors have been increasingly pricing in a December U.S. central bank rate cut, citing weaker U.S. economic data and easing inflation pressures.

Amongst the latest data, U.S. factory activity weakened further in November, with the ISM manufacturing PMI dropping to 48.2 from 48.7 in October, missing market expectations of 49.0.

A potential easing of policy by the central bank has bolstered risk appetite across the region, with traders expecting a weaker dollar to support equities and commodities alike.