Investing.com– Most Asian stocks were flat on Tuesday as focus turned to a barrage of key earnings due in the coming days, while Japanese markets extended gains after the country’s ruling coalition lost its parliamentary majority.
Regional markets brushed off a positive lead-in from Wall Street, as U.S. stocks drifted higher amid some hopes that geopolitical tensions in the Middle East will not worsen.
Wall Street futures were flat in Asian trade, with focus squarely on a slew of mega-cap technology earnings due in the coming days.
Japan’s Nikkei extends gains after election results
Japan’s Nikkei 225 and TOPIX indexes were outliers among Asian stocks, rising 0.3% and 0.9% respectively as they extended strong gains from the prior session. Nippon Paint Holdings Co Ltd (TYO:4612) was the biggest boost to the TOPIX, rallying as much as 24% after it announced a deal to buy U.S. chemical maker AOC.
Broader gains in Japanese markets came tracking a sharp drop in the yen, after the country’s ruling coalition, led by the Liberal Democratic Party, lost its parliamentary majority in the general elections held over the weekend.
The LDP will now have to seek coalitions with smaller regional parties to keep power, presenting an uncertain outlook for Japanese politics. But the prospect of political uncertainty spurred bets that the Bank of Japan will not have enough headroom to keep raising interest rates.
The BOJ is set to meet later this week and is widely expected to keep interest rates unchanged.
