HONG KONG -
Tokyo led Asian markets lower Tuesday, hit by a stronger yen as investors fled to safety following a suspected terror attack in Saint Petersburg that left 11 people dead and fanned fresh geopolitical concerns.
The blast on a metro train in Russia's second city dragged US and European equities lower, after a positive start to the week across Asia, with traders also on edge about the upcoming summit between Chinese President Xi Jinping and Donald Trump.
Trump at the weekend said he expects the meeting with Xi in Florida "will be a very difficult one", which follows a series of attacks on Beijing's trade policies and accusations it is a currency manipulator.
A world rally fuelled by hopes for Trump's agenda sputtered last month, despite a slew of strong economic readings from China to Europe and the United States.
"Markets are at an interesting juncture at the moment," said Greg McKenna, chief market strategist at AxiTrader, in a note. "It's caught between what has been a real pick-up in data over the past four months and some fading notions about the effectiveness of Donald Trump and his ability to implement his agenda."
He added that while Trump's failure to push through his repeal of Obamacare last month was seen by some as a chance to concentrate on his tax reforms, most investors worry about his chances of pushing through promised economy-boosting measures.
"The question for traders and markets more broadly is what comes next," McKenna said.
- Ruble stable, rand sinks -
Tokyo ended the morning down 0.4 percent, while Sydney, Seoul and Singapore were all 0.1 percent lower.
Hong Kong and Shanghai were closed for public holidays.
On currency markets the dollar dipped against the yen, sitting around 110.50 yen, well down from the levels around 111.30 yen Monday in Asia.
The Russian ruble stabilised against the dollar, having swung wildly Monday soon after news of the Saint Petersburg explosion.
But the South African rand shed one percent after Standard and Poor's cut its rating on the country to "junk" owing to "heightened political and institutional uncertainties" following President Jacob Zuma's decision to sack top ministers last week, including respected finance minister Pravin Gordhan.
The unit had already fallen more than 10 percent since March 27, when speculation started swirling that Gordhan's job was in danger.
Other key events this week include the March US jobs report and the release of minutes from the most recent meetings of the Federal Reserve and European Central Bank.
- Key figures at 0230 GMT -
Tokyo - Nikkei 225: DOWN 0.4 percent at 18,906.69 (break)
Hong Kong - Hang Seng: Closed for public holiday
Shanghai - Composite: Closed for public holiday
Euro/dollar: DOWN at $1.0666 from $1.0671
Pound/dollar: UP at $1.2491 from $1.2484
Dollar/yen: DOWN at 110.53 yen from 110.91 yen
Oil - West Texas Intermediate: UP one cent at $50.25 per barrel
Oil - Brent North Sea: UP one cents at $53.13 per barrel
New York - Dow: DOWN 0.1 percent at 20,650.21 (close)
London - FTSE 100: DOWN 0.6 percent at 7,282.69 (close)
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