BEIJING (dpa-AFX) - Asian stocks ended mostly lower on Tuesday as investors looked forward to the release of crucial U.S. inflation data this week for additional clues on the Federal Reserve's rate trajectory.
Investors also kept a close watch on the conflict in the Middle East after Iran threatened to retaliate against any new U.S. attacks on its assets and Saudi-led coalition forces vowed a resolute response to a wave of attacks from Houthi rebels.
Amid escalating tensions with the U.S., Teheran said a deal with Oman to manage shipping through the Strait of Hormuz was imminent.
Gold prices slipped toward $4,400 an ounce in choppy trade and the U.S. dollar index was subdued on fiscal concerns while Brent crude futures rose toward $99 a barrel, hitting a six-week high on growing risks of a prolonged conflict in the Middle East.
China's Shanghai Composite index edged up 0.20 percent to 3,940.55 after customs data showed China's exports and imports logged double-digit growth in August, fueling tensions ahead of a crucial meeting in Washington this month between Xi Jinping and Donald Trump.
Data showed China's exports increased 25.0 percent year-on-year in August, faster than the 23.9 percent growth in July. Likewise, growth in imports accelerated to 28.2 percent from 27.5 percent in July.
Hong Kong's Hang Seng index dropped 0.38 percent to 25,317.18, extending losses from the previous session.
Japanese markets fell sharply as the yen strengthened to its highest level since February on growing expectations that the Bank of Japan will shift to a more hawkish posture.
The Nikkei tumbled 1.70 percent to 65,269.33 as investors priced in a rate hike by the central bank next week. The broader Topix index settled 1.83 percent lower at 4,050.33. Tech stocks ended on a mixed note, with Kioxia Holdings falling 3.6 percent while SoftBank Group shares surged 5.5 percent.
Seoul stocks reversed course to end lower, snapping a three-day winning streak as higher energy prices added to inflation concerns.
The Kospi index dipped 0.58 percent to 6,954.52. Automaker Hyundai Motor lost 2 percent and defense giant Hanwha Aerospace fell 1.2 percent while state-run utility Korea Electric Power advanced 4.1 percent.
Australian markets slumped on concerns about stubborn oil prices and a dim business outlook for banks. The benchmark S&P/ASX 200 fell 1.0 percent to 8,920.80 in its worst session since early June, with banks, property developers and retailers pacing the declines. The broader All Ordinaries index dropped 0.94 percent to 9,114.30.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 index ended 1.08 percent lower at 13,792.90, extending losses for the second straight session.
U.S. stock markets were closed on Monday for Labor Day holiday.
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