Asian Stocks Mixed as Oil Prices Surge and Interest Rate Outlook Remains Uncertain

Asian stock markets were mixed in cautious trading early Wednesday as investors watched for developments on interest rates and the war with Iran continued to push oil prices higher.

The Nikkei 225 in Japan was nearly unchanged at 65,249.95, while South Korea's Kospi gained 1.2% to 7,041.10. In contrast, Hong Kong's Hang Seng dipped 0.1% to 25,287.99.

The price of Brent crude, the international standard, surged 1.4% to $99.30 a barrel, briefly climbing as high as $99.46 overnight. This increase has worsened worries over high inflation, with economists expecting a closely watched report on U.S. inflation due out Friday to show a rate of 3.3%, down from July's 3.4% but still above the Federal Reserve's target of 2%.

The yield on the 10-year Treasury rose to 4.79% from 4.78%, its highest level since autumn 2023, while Japan's central bank will meet next week to decide on its benchmark rate, with market watchers expecting an increase. The U.S. Treasury secretary has criticized Japanese government policies that favor a weak yen.