Middle East Tensions Send Oil Prices Soaring

Tensions in the Middle East pushed oil prices higher, causing Asian shares and US futures to decline on Tuesday. The conflict between Saudi Arabia's government and Iranian-backed rebels in Yemen escalated with a wave of Houthi attacks on oil facilities and utilities.

Japan's Nikkei 225 index fell 1.7% to 65,269.33 as major exporters were sold due to the surge in the value of the Japanese yen. Toyota Motor Corp. shed 4.1%, while electronics maker Panasonic Holdings Corp. fell 5.8%. The yen has gained value against the dollar over the past few days on expectations that the US and Japanese governments might intervene to prevent further weakening.

The US dollar slipped to 153.73 Japanese yen from 154.34 yen earlier in the day. South Korea's Kospi also fell back after an early rally, losing 0.6% to 6,954.52. Hong Kong's Hang Seng lost 0.3% to 25,345.04.

China's exports jumped 25% year-on-year in August, driven by strong demand for autos and high-tech items. In Australia, the S&P/ASX 200 declined 1% to 8,920.80. The US will release its August report on inflation at the wholesale level, called the Producer Price Index, or PPI, on Thursday. This provides details on prices for businesses before they pass along costs to consumers.

Brent crude added 1.4% to $98.40 a barrel as tensions simmered in the six-month US war with Iran. Benchmark U.S. crude surged 2.6% to $93.88 a barrel.