Oil Price Surge Weighs on Asian Shares Ahead of Key Central Bank Meetings

Asian shares were under pressure on Tuesday as investors weighed rising oil prices and calls for a slowdown in AI development. The region's benchmark index, MSCI's broadest measure of Asia-Pacific shares outside Japan, fell 0.12%. South Korea's market dipped 0.25%, while Japan's Nikkei edged 0.19% higher after reversing early losses.

The increase in oil prices has added to caution ahead of key central bank meetings in the U.S. and Japan. The Federal Open Market Committee begins its two-day meeting later in the day, with markets pricing in a 90% chance of a rate hike that would mark the Fed's first increase since mid-2023.

The Bank of Japan is expected to raise its interest rate by 25 basis points to 1.25% at the end of its two-day meeting on Friday and signal more tightening ahead. Policymakers are seeking to shore up the yen after intervention helped steer the currency away from a 40-year low.