Asia Stocks Rise Amid Central Bank Week and Middle East Tensions

Asian equity markets edged higher Tuesday, extending gains for a second consecutive session as investors navigated a packed central bank schedule and ongoing uncertainty surrounding the U.S.-Iran conflict. MSCI's broadest Asia-Pacific index outside Japan climbed 0.9%, with South Korea's Kospi surging 2.4% and Japan's Nikkei 225 adding 0.3%. However, S&P 500 futures dipped 0.3%, signaling cautious sentiment on Wall Street after Monday's 1.0% rebound snapped a four-day losing streak driven by strength in AI-related stocks. The index still trades roughly 3% below pre-conflict levels.

Analyst Chris Weston of Pepperstone Group described the rally as more of a positioning squeeze than a sustained directional move, expressing reluctance to chase dips at this stage. Oil markets remained volatile, with Brent crude jumping 2.7% to $102.89 per barrel after several U.S. allies declined Trump's request to deploy warships protecting tankers through the Strait of Hormuz — a critical corridor handling nearly one-fifth of the world's energy supply.

Central banks are squarely in focus this week. The Reserve Bank of Australia is expected to raise rates to 4.1%, setting the tone ahead of decisions from the Federal Reserve, European Central Bank, Bank of England, and Bank of Japan — all widely anticipated to hold rates steady. The Bank for International Settlements advised policymakers to avoid overreacting to the energy price spike, calling it a classic supply shock to look through. Fed funds futures currently reflect a 99.1% probability the Fed holds rates unchanged Wednesday.

In currency markets, the U.S. dollar index held near 99.963, while the Japanese yen weakened to 159.4 per dollar. Gold hovered at $5,011.53, Bitcoin rose 2.0% to $75,705, and Ether gained 0.7% to $2,362, reflecting sustained appetite for alternative assets amid global uncertainty.