Asia markets were mixed Tuesday, tracking US equities' performance overnight, with some analysts saying traders are turning more cautious and hesitant after the recent market rally.
In Singapore, the Straits Times Index opened 6.07 points, or 0.21 per cent, higher at 2,853.13 points, The Business Times reported.
The Nikkei 225 was flat in early trade, wavering between positive and negative territories. In South Korea, the Kospi added 0.17 per cent.
The Australian S&P/ASX 200 index was lower by 0.49 per cent in early trade, weighed by losses in the energy subindex, which fell 1.53 per cent, and the financials subindex, which was 0.56 per cent lower.
Rodrigo Catril, a currency strategist for fixed income, currencies and commodities at the National Australia Bank, said in a note Tuesday that recent trading suggest markets have turned to a more "cautiously optimistic mode," following the delayed upward reaction to the European Central Bank's fresh stimulus last week.
Catril said while Asia and European equities extended their gains on Monday, US stocks reflected "a more hesitant mood."
"This cautious mode has...been reflected in currencies with the safe haven Japanese yen the only (small) outperformer against the US dollar," he wrote.
In the currency market, the Japanese yen remained at the 113 handle against the dollar, ahead of the Bank of Japan's (BOJ) monetary policy decision due later in the day. The dollar/yen pair traded at 113.80 in early morning trade.
Japanese exporters traded mixed, with Toyota and Nissan losing 0.29 and 1.03 per cent, respectively. Electronics maker Sony added 0.2 per cent. A strong yen is usually a negative for exporters as it reduces their overseas profits when converted into local currency.
Down Under, the Australian dollar/US dollar pair traded up 0.16 per cent at 0.7525 as of 8:30 a.m. HK/SIN time.
Evan Lucas, market strategist at IG, said in a morning note that one reason the Australian dollar (AUD) is seeing strength is on a carry trade, given the country's AAA sovereign ratings, the relatively good shape of its budget and better bond yields compared with its peers. Carry trades seek to profit from expectations of better yields and potential appreciation in a different currency.
Other reasons for the Australian dollar's rise include the rebound in commodity prices in recent weeks, the Reserve Bank of Australia's (RBA) decision to keep the cash rate at 2 per cent on February 29 and China's heavy spending on materials and infrastructure, which makes "the quasi-China currency in the Australian dollar hot property," Lucas said. China is among Australia's largest trading partners, providing a large market for its resources exports.
Down Under, the Reserve Bank of Australia's March meeting minutes were released, with the central bank saying there were "reasonable prospects" for continued economic growth, Reuters reported.
Australian resources producers were lower, with shares of Rio Tinto falling 0.94 per cent, BHP Billiton down 0.45 per cent and South32 shedding 3.48 per cent.
Commodity prices retreated overnight. Copper futures on the London Metal Exchange (LME) fell 0.5 per cent, while three-month aluminium shed 1.2 per cent and three-month nickel was lower by 2.5 per cent. Iron ore was down to $55.50 a tonne, after moving past the US$60 (S$83)-mark last week.
Oil prices advanced during Asian hours, after retreating overnight on renewed concerns about oversupply. US crude futures were up 0.38 per cent at US$37.32 a barrel, following a decline of 3.4 per cent during US hours. Global benchmark Brent was up 0.3 per cent at $39.65 a barrel, after finishing lower by 2 per cent overnight.
Reuters reported that a poll of analysts showed crude inventories across the US likely hit record highs for a fifth straight week last week, forecasting a rise of 3.3 million barrels.
Energy plays in Asia were mostly lower, with Santos down 1.38 per cent, Woodside Petroleum off by 1.79 per cent and Japan's Inpex down 0.98 per cent.
In corporate news, the Japanese Nikkei newspaper reported that Toshiba is in a late-stage negotiations with Chinese household appliance giant Midea Group to sell its white goods business.
Toshiba is looking to offload the majority of shares in its fully-owned subsidiary Toshiba Lifestyle Products & Services by this summer to Midea, the Nikkei reported, adding the deal is expected to bring tens of billions of yen.
Shares of Toshiba were up 1.03 per cent.
Overnight, major US indexes closed mixed, with the Dow Jones industrial average flat, the S&P 500 lower by 0.13 per cent and the Nasdaq composite flat.
In central bank watch, the BOJ will wrap up its two-day policy meeting; most market watchers expect the central bank to stand pat on rates today. In the US, the Federal Open Market Committee begins its two-day meeting.
On the data front, China's foreign direct invest numbers for February are due.