Asian Markets Dip as AI Buzz and Middle East Tension Steer Investors Toward Safety

Asian stock indices slipped during the trading day, with Japan’s market mirroring a decline seen on U. S. exchanges after mixed signals from the tech giant Nvidia. Investors shifted away from riskier assets, turning instead to the yen and U. S. Treasury bonds for steadiness. The move came amid a backdrop of uncertainty in the Middle East, where talks between the United States and Iran over Tehran’s nuclear program stalled, keeping oil prices on edge. Nvidia reported quarterly earnings that beat expectations and projected higher revenue for the current quarter, yet its shares stayed flat after hours. Analysts suggested that the company’s lofty valuation may have limited enthusiasm, even as it delivered solid numbers. The broader tech sector felt the pressure, reflected in a drop of about 0. 4% in U. S. equity futures for the S&P 500 and Nasdaq indices during Asian trading hours. Currency markets responded to the shift in sentiment. The dollar strengthened slightly against a basket of currencies, while the Japanese yen gained about 0. 2% against the dollar, offering a safer haven for traders. The U. S. Treasury yield curve eased modestly, with the 10‑year note falling to just over 4% and the 30‑year note below 4. 7%.Economic data from Japan showed a slowdown in inflation and weaker factory output, complicating the case for higher interest rates by the Bank of Japan. Meanwhile, China’s central bank announced a move to cut foreign‑exchange risk reserves for certain forward contracts, aiming to lower the cost of dollar purchases. The yuan continued its upward trend against the U. S. dollar, breaking a psychological barrier it had not crossed since 2020. In the United Kingdom, a closely watched by‑election in Greater Manchester could influence political dynamics. The result is expected to be tight among Labour, Reform UK, and the Greens, potentially adding pressure on Prime Minister Keir Starmer after recent policy shifts. Meanwhile, commodity prices remained relatively flat: gold held steady at around $5, 175 per ounce and crude oil edged up slightly to about $65. 27 a barrel. Cryptocurrencies also saw minor declines, with Bitcoin falling to roughly $67, 290 and Ethereum to about $2, 017.