Asian stock markets trade mixed on Tuesday as investors remain on edge amid fading hopes for a US-Iran peace deal and de-escalation of tensions in the Middle East.

Japan Coincident Index: 116.5 (March) vs 116.3

Japan Leading Economic Index registered at 114.5, below expectations (114.6) in March

EUR/JPY extends its gains for the fourth successive day, trading around 185.40 during the Asian hours on Tuesday. The currency cross appreciates as the Japanese Yen (JPY) struggles following the disappointing release of Japan's Household Spending data.

Australia National Australia Bank's Business Conditions: 3 (April) vs previous 6

Australia National Australia Bank's Business Confidence rose from previous -29 to -24 in April

Japan’s Finance Minister Satsuki Katayama said that Japan and the United States (US) reaffirmed their ‌close cooperation on currency moves after a meeting with US Treasury Secretary Scott Bessent, Reuters reported on Tuesday.

US President Donald Trump has grown increasingly frustrated with how the Iranians are handling talks to end the conflict, and some Trump aides say that he is now more seriously considering a resumption of major combat operations than he has in recent weeks, CNN reported on Monday.

The Bank of Japan (BoJ) published the Summary of Opinions from the April monetary policy meeting, with the key findings noted below.   

Japan JP Foreign Reserves down to $1B in April from previous $1374.7B

Japan Overall Household Spending (YoY) came in at -2.9% below forecasts (-1.3%) in March

ING’s Lynn Song notes that stronger China Consumer Price Index (CPI) and Producer Price Index (PPI) data in April, alongside resilient exports, reinforce a reflation narrative that reduces urgency for People’s Bank of China (PBoC) easing.

Societe Generale analysts observe USD/CNY trading below 6.80, with the Chinese Yuan at its strongest level since February 2023 ahead of the US/China summit.

DBS Group Research economist Ma Tieying revises Taiwan’s policy rate outlook after upgrading 2026 Gross Domestic Product (GDP) and Consumer Price Index (CPI) forecasts. The team now expects an additional 12.5 bps hike in 3Q, taking the policy discount rate to 2.125%.

BNP Paribas economists note Chinese GDP growth at 5.0% year-on-year in Q1 2026, after 5% in 2025, and expects a moderate slowdown in 2026. They highlight a K-shaped pattern with strong exports but weak domestic demand and ongoing property sector stress.

UOB economists Julia Goh and Loke Siew Ting note that Bank Negara Malaysia’s (BNM) foreign reserves climbed to USD129.7bn at end-April 2026, the highest since 2014, providing a stronger buffer for the Malaysian Ringgit (MYR).

Rabobank’s Senior FX Strategist Jane Foley notes Japanese wage data have improved, with unions securing solid ‘shunto’ wage hikes and real wages rising again, supporting the Bank of Japan’s (BoJ) desired virtuous cycle.

HSBC economists argue Emerging Markets (EM) remain well positioned in 2026 as the US Dollar (USD) weakens and global policy easing supports a broadening of returns beyond US mega-cap tech.

Societe Generale economist Kunal Kundu expects India’s April headline Consumer Price Index (CPI) inflation to rise to 3.9% year-on-year from 3.4% in March, driven by food-and-beverages and fuel components.

The US President Donald Trump is meeting with his national security team, considering the possibility of resuming military action against Iran, as Tehran’s response fell short of complying with Washington’s demands, three officials said to Axios.

United States 3-Year Note Auction rose from previous 3.897% to 3.965%

TD Securities strategists expect the Bank of Canada (BoC) to hold its policy rate at 2.25% through 2026 before returning to a 2.75% neutral level in 2027 via 25 bp hikes in January and March.

United States Existing Home Sales Change (MoM) increased to 0.2% in April from previous -3.6%

United States Existing Home Sales (MoM) registered at 4.02M, below expectations (4.05M) in April

BNP Paribas economists expect United Kingdom (UK) Gross Domestic Product (GDP) growth to slow to 0.7% in 2026 from 1.4% in 2025, with quarterly expansion dropping to about 0.1%. Inflation is projected to re-accelerate to 3.6% before easing only slightly.

TD Securities economists expect US inflation data to firm in April, with core Consumer Price Index (CPI) boosted by shelter and airfare components and headline CPI lifted by higher Oil and food prices.

ING’s Frantisek Taborsky says Central and Eastern European (CEE) FX is benefiting from positive global sentiment, with EUR/HUF breaking to new lows below 355. Markets expect Hungary’s new Prime Minister Peter Magyar to unlock EU funds and advance Euro adoption.

HSBC reports that the Norwegian Krone (NOK) has gained alongside other risk-on currencies versus the Dollar, supported by improved sentiment and domestic policy.

Societe Generale’s Kenneth Broux notes Brent is up 4%, trading near $105.2, after carving out an interim low around $96 and repeatedly defending its 50-day moving average.

ING’s Chris Turner notes Sterling is softening after UK local elections, as Labour’s losses fuel talk of a leadership contest and a leftward policy shift. He highlights the risk of developments around Manchester Mayor Andy Burnham re-entering parliament.