Middle East Tensions Send Oil Prices Soaring, Asian Shares Plummet
Asian shares and US futures declined on Tuesday due to flaring conflict in the Middle East, which pushed oil prices higher. The Houthi attacks on oil facilities and utilities in Saudi Arabia's southern region have escalated a renewed conflict between a key US ally and Iranian-backed rebels in Yemen.
Tokyo's Nikkei 225 gave up early gains, falling 1.7% to 65,269.33 as major exporters were sold due to a surge in the value of the Japanese yen. Toyota Motor Corp. shares shed 4.1%, while electronics maker Panasonic Holdings Corp. fell 5.8%. The yen has gained value against the dollar in recent days on expectations that the US and Japanese governments might intervene to prevent further weakening.
The revision in Japan's economic growth rate, which was reported at 1.4% in the April-June quarter, reflects stronger business investment than earlier estimated. However, overall investment still contracted at minus 0.9%, according to Norihiro Yamaguchi of Oxford Economics.