Asia's stock markets edged lower on Monday as rising tensions between China and Japan weighed on sentiment. At the same time, investors prepared for a week of delayed US data and major corporate earnings. Japan's Nikkei slipped 0.2 per cent after Beijing cautioned its citizens against travelling to Japan, sending tourism and retail stocks sharply down. Isetan Mitsukoshi, Ryohin Keikaku and Shiseido each dropped around 10 per cent. Hong Kong and China indexes fell about 1 per cent, while Australia's market was held flat by a 0.6 per cent decline in BHP following a UK court ruling on a Brazil dam collapse. The cautious tone followed fading expectations of a US interest rate cut in December, now priced below 50 per cent after policymakers struck a hesitant stance. S&P 500 futures rose 0.4 per cent and Nasdaq 100 futures 0.7 per cent in Asian trade, while European futures slipped. Japan's economy contracted for the first time in six quarters due to US tariff pressure, and a report on a $110 billion stimulus plan pushed bond yields higher, with 20-year yields hitting a 26-year peak of 2.75 per cent. Analysts warned that doubts over fiscal discipline could add pressure on the yen. Investors are awaiting Thursday's delayed US September jobs report, though analysts say the figures may be too outdated to shift the Federal Reserve's hawkish tone. Attention is instead on US corporate earnings. Nvidia's results are considered the key test for markets after its shares surged 1,000 per cent since late 2022, recently topping $5 trillion in market value. The US dollar inched higher, keeping the euro below $1.16. Bitcoin steadied at $95,000 after its steepest weekly drop since March. Attribution: Reuters
