Nikkei 225 slipped 1.7%, the TOPIX index slid 1.1%, KOSPI skidded more than 1%, ASX 200 stumbled 1.4%, while the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes gaining between 0.2% and 0.3%
Most Asian stocks dropped on Tuesday as uncertainty over interest rates and the U.S. presidential election kept traders largely risk-averse, while Chinese markets rose after an interest rate cut.
Regional markets took a weak lead-in from Wall Street, as U.S. stock benchmarks pulled back from record highs as Treasury yields gained and as the earnings season loomed.
U.S. stock index futures were slightly negative in Asian trade.
Investors were now largely awaiting the U.S. presidential elections, which are just about two weeks away. Republican nominee Donald Trump was seen gaining better odds against Vice President Kamala Harris in recent polls.
Focus this week was also on a slew of key U.S. earnings, with Asian earnings set to pick up in the coming weeks.
Nikkei 225 was the worst performer in Asia, slipping 1.7%, while the TOPIX index slid 1.1%.
Losses in Japanese shares came even as the yen hit its lowest level in almost three months, as the currency was pressured by uncertainty over the BoJ’s capacity to raise interest rates further. A softer yen usually benefits export-oriented Japanese stocks.
Japanese general elections are set to take place later this month, while the Bank of Japan is set to meet at the end of October.
Before that, inflation data from Tokyo is due later this week and is likely to factor into the outlook for Japanese interest rates.
Wider Asian stocks pulled back. KOSPI skidded more than 1%, while Australia’s ASX 200 stumbled 1.4%, with the latter seeing heavy profit-taking after reaching record highs earlier in October.
Chinese markets were the sole bright spot in Asia, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes gaining between 0.2% and 0.3% in choppy trade. Hong Kong’s Hang Seng index advanced 0.4%.
Chinese stocks took some cheer from a slightly bigger-than-expected cut to the People’s Bank of China’s (PBC) benchmark loan prime rate on Monday.