Middle East Tensions Push Asian Shares Lower

The Middle East conflict has pushed oil prices higher, causing Asian shares and US futures to decline on Tuesday. The Houthi attacks on oil facilities and utilities in Saudi Arabia's southern region have escalated tensions between the country and Iranian-backed rebels in Yemen.

Tokyo's Nikkei 225 dropped 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. shed 4.1%, while electronics maker Panasonic Holdings Corp. fell 5.8%. The yen has gained value against the dollar in the past few days on expectations that the US and Japanese governments might intervene to prevent it from weakening further.

The Japanese economy grew at a slightly faster annual pace in the April-June quarter, revised to 1.4% from an earlier estimate of 1.1%. Norihiro Yamaguchi of Oxford Economics noted that stronger business investment drove the revision, although overall investment still contracted by 0.9%.

China's exports jumped 25% year-on-year in August, driven by strong demand for autos and high-tech items. However, the Asian market was otherwise hit, with South Korea's Kospi falling back after an early rally, and Hong Kong's Hang Seng losing 0.3%. The Shanghai Composite index edged 0.2% higher.

Wall Street will receive important updates on inflation this week, including the US Producer Price Index report on Thursday and the Consumer Price Index report on Friday. Brent crude added 1.4% to $98.40 a barrel, while benchmark US crude surged 2.6% to $93.88 a barrel.