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A person walks past a stock quotation board showing the Nikkei share average outside a brokerage in Tokyo, Japan, June 16, 2026. REUTERS/Manami Yamada Purchase Licensing Rights, opens new tab
SINGAPORE, Aug 4 (Reuters) - Asian markets made cautious gains at the start of trading as investors followed a global rally, with oil prices holding near the lowest levels in weeks as the U.S.-Iran conflict remained at a stalemate.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MISX00000PUS), opens new tab was up 0.1%, led by South Korean shares (.KS11), opens new tab rallying as much as 2.1%. Japan's Nikkei 225 (.N225), opens new tab slid 0.3%, while S&P 500 e-mini futures nudged 0.1% higher.
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Overnight, markets took confidence from data showing that U.S. manufacturing activity increased to the highest level in more than four years in July, sending the Dow Jones Industrial Average (.DJI), opens new tab to a record close.
"Risk markets have clearly turned a corner," said Chris Weston, head of research at Pepperstone Group in Melbourne. "If the constructive tone from European and U.S. equity markets carries through, buyers should emerge early in the session and provide support for regional risk assets."
Oil prices made limited gains as trading resumed in Asia, with Brent crude up 0.6% at $84.29 a barrel, after falling to a three-week low on Monday as U.S. President Donald Trump said he had held off on a fresh attack on Iran as a gesture of goodwill in peace talks. However, Tehran has denied that any negotiations are taking place.
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Against the yen , the dollar was up 0.3% at 157.625 yen, rebuilding strength after coordinated intervention by U.S. and Japanese authorities to prop up the yen last week.
The U.S. dollar index , which measures the greenback's strength against a basket of six currencies, was pinned near the lowest levels of the past two months at 99.99.
The yield on the U.S. 10-year Treasury bond was up 0.2 basis point at 4.684%.
Market pricing continues to indicate that September's Federal Reserve meeting will bring an increase to interest rates. Fed funds futures are pricing an implied 65% probability of a 25-basis-point hike at the U.S. central bank's next two-day meeting ending on September 16, according to the CME Group's FedWatch tool.
Federal Reserve Bank of New York President John Williams said he remained optimistic that inflation pressures are on track to ease gradually, but said the Fed will hike rates if inflation doesn't slow.
In cryptocurrencies, bitcoin and ether both slipped 0.5% to $63,446.35 and $1,857.44 respectively.
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Reporting by Gregor Stuart Hunter Editing by Shri Navaratnam
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Thomson Reuters
Gregor Stuart Hunter is a correspondent reporting on breaking news on finance and markets in Asia, based in Singapore. During prior postings in Hong Kong, Taipei and Abu Dhabi, Gregor previously worked for Bloomberg News and The Wall Street Journal, and wrote for The Guardian, Monocle and Fortune, among others. He is a CFA Charterholder.
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