Asia shares, oil slip as markets reprice Fed expectations

By Gregor Stuart Hunter

SINGAPORE, June 23 (Reuters) - Asian stocks and lipid prices fell connected Tuesday aft the U.S. waived sanctions connected Iran, portion traders grappled with rising expectations the Federal Reserve ‌may instrumentality much assertive enactment to tackle ostentation aboriginal this year.

MSCI's broadest scale of Asia-Pacific shares extracurricular ‌Japan sank 2.9%, portion S&P 500 e-mini futures slipped 0.9%. Brent crude slid 1.22% to $76.95 per barrel.

Japan's Nikkei 225 sank 3%, portion South ​Korea's Kospi scale plunged 8.1%.

"These are acold from dull markets," said Chris Weston, caput of probe astatine Pepperstone Group successful Melbourne. "The erstwhile generals of the marketplace look to person mislaid momentum, and investors are rotating into different areas of the marketplace that are much defensive, little AI-focused and connection much predictable currency flows."

In aboriginal European trades, the pan-region ‌Euro Stoxx 50 futures were down 0.96%, ⁠German DAX futures fell 1%, FTSE futures were down 0.95%.

Stocks connected Wall Street moved little overnight, with the S&P 500 down 0.4% and the Nasdaq Composite slipping 1.3%, dragged ⁠by declines successful megacap exertion stocks including Alphabet and SpaceX.

Oil prices settled much than 3% little arsenic proviso concerns eased aft U.S. Vice President JD Vance said advancement had been made successful talks with Iran and that the Strait of ​Hormuz was ​open.

YEN NEAR 40-YEAR LOW

In currency markets, the yen was level ​against the dollar astatine 161.665 yen, again ‌approaching its weakest levels successful 40 years aft a volatile trading league successful the U.S. overnight.

Japan's Finance Minister Satsuki Katayama said connected Tuesday she held an online gathering with U.S. Treasury Secretary Scott Bessent a time earlier to sermon planetary fiscal markets, arsenic concerns equine implicit crisp currency swings.

Sterling weakened 0.1% to $1.3234 aft British Prime Minister Keir Starmer said connected Monday helium would resign, paving the mode for what is expected to beryllium an orderly transportation of ‌power to frontrunner Andy Burnham.

The U.S. dollar index, which measures ​the greenback's spot against a handbasket of six currencies, roseate 0.07% ​to 101.08, adjacent to its highest since May ​2025.

Traders are grappling with expectations of an accelerated docket of complaint hikes by a much ‌aggressive Fed nether the enactment of caller Chair ​Kevin Warsh.

Fed funds futures are ​pricing an implied 54% probability of astatine slightest 2 25-basis-point hikes earlier the extremity of the year, compared with a 15.2% accidental a week ago, according to the CME Group's FedWatch tool.

The output connected ​the U.S. 10-year Treasury enslaved fell ‌0.61 ground points to 4.501%.

Gold fell 1.75% to $4,118.55 an ounce. In cryptocurrency markets, bitcoin declined 1.56% to $63,368.73, ​while ether declined 1.17% to $1,712.74.

(Reporting by Gregor Stuart Hunter successful Singapore; Additional reporting by Rocky Swift ​in Tokyo; Editing by Jacqueline Wong and Jamie Freed)