Most Asian stocks retreat as Yen gain weighs on Japanese shares

SINGAPORE (BLOOMBERG) - Most Asian stocks fell as a rebound in the yen hurt Japanese shares and investors weighed the outlook for U.S. interest rates and Greece's debt talks.

About three shares dropped for each that gained on the MSCI Asia Pacific Index, which traded little changed at 147.44 as of 9:01 a.m. in Tokyo on Tuesday. Japan's Topix index slid 0.8 per cent after the yen gained 0.9 per cent against the dollar on Monday, when the Standard & Poor's 500 Index fell to a two-month low.

Strong jobs data last Friday bolstered bets the Federal Reserve will raise interest rates this year. German Chancellor Angela Merkel demanded urgent action from the Greek government on Monday after it rejected the terms of an aid package again last week.

"The market just had a correction in anticipation of higher interest-rate environment," Kirk Hartman, president and chief investment officer of Wells Capital Management in Los Angeles, said on Bloomberg TV. "A lot of people are worried about Greece. It would be better for Greece to restructure, then negotiate. We're in for a long summer."

Creditors are growing increasingly exasperated with Greek Prime Minister Alexis Tsipras's negotiating tactics. U.S. President Barack Obama voiced his concerns about the standoff over Greek financial aid at a summit of Group of Seven leaders. European Commission President Jean-Claude Juncker said Greece is not doing enough to ensure it can stay in the euro.

E-mini futures on the S&P 500 Index added 0.1 per cent today after the underlying equity measure lost 0.7 per cent on Monday. Reports on U.S. consumer sentiment and retail sales are due this week, both of which are forecast to show an improving economy.

South Korea's Kospi index slipped 0.1 per cent on Tuesday. New Zealand's NZX 50 Index lost 0.3 per cent. Australia's S&P/ASX 200 Index fell 0.1 per cent as trading resumes following a holiday on Monday. Markets in China and Hong Kong have yet to open.

China Inflation China may report slowing inflation Tuesday and ongoing declines in producer prices, potentially fueling speculation over further policy easing as the stock market shrugs off mixed economic data.

The Shanghai Composite Index climbed 2.2 percent on Monday, extending a seven-year high, on bets MSCI Inc. will include mainland shares in its indexes. The value of Chinese stocks is poised to reach $10 trillion after a world-beating rally added virtually the equivalent of Japan's equities market this year.

Join ST's Telegram channel and get the latest breaking news delivered to you.