Asian equities inched up on Tuesday after a prior session rally on reports of a peace agreement between Iran and the United States, but the advance lost momentum as markets shifted focus to a slate of central bank decisions, including an expected policy move from the Bank of Japan.
The calming of geopolitical tensions had briefly supported risk assets, prompting a rebound in regional markets. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2%, led by South Korean stocks, while Japan's Nikkei slipped 0.2% from record highs.
CENTRAL BANKS IN FOCUS
The Bank of Japan was expected to raise interest rates to a 31-year high later on Tuesday, with Deputy Governor Shinichi Uchida due to give the post-meeting briefing. The Reserve Bank of Australia was forecast in a Reuters poll to pause its tightening cycle.
Westpac analysts called the Iran agreement "an important diplomatic breakthrough that should remove a key source of market volatility", but said "the durability of the deal is likely to be tested in the future."
OVERNIGHT MOVES
Wall Street rallied overnight, with the S&P 500 up 1.7% and the Nasdaq Composite up 3.1%, while Brent crude rose 0.6% to $83.74 a barrel, near three-month lows.
Sources: Bangkok Post Finance