Asian shares and US futures decline, while oil prices press higher

BANGKOK (AP) — Asian shares and U.S. futures skidded Tuesday as flaring conflict in the Middle East pushed oil prices higher.

A wave of Houthi attacks on oil facilities and utilities in Saudi Arabia’s southern region has escalated a renewed conflict between an important U.S. ally and Iranian-backed rebels in Yemen.

Tokyo’s Nikkei 225 gave up early gains, sinking 1.7% to 65,269.33 as major exporters were sold due to a surge in the value of the Japanese yen.

Shares in Toyota Motor Corp. shed 4.1%, while electronics maker Panasonic Holdings Corp. fell 5.8%.

Early Tuesday, the U.S. dollar slipped to 153.73 Japanese yen from 154.34 yen. The yen has gained value against the dollar in the past few days on expectations that the U.S. and Japanese governments might intervene to prevent the yen from weakening further. Last week, the dollar briefly rose to about 160 yen.

The government reported that the economy grew at a slightly faster annual pace in the April-June quarter than earlier reported, at 1.4%. Earlier, the Cabinet Office had estimated the annualized growth rate at 1.1%.

The revision reflects stronger business investment than earlier reported, though overall investment still contracted, at minus 0.9%, Norihiro Yamaguchi of Oxford Economics said in a commentary.

“The boost to consumption from policy measures seen in April-May is already fading, and supply-side-driven inflation will accelerate ahead as firms will pass on increased costs, deteriorating consumers’ purchasing power,” he said.

South Korea’s Kospi fell back after an early rally, losing 0.6% to 6,954.52. Shares in Samsung Electronics handed back early gains to slip 0.2%.

Hong Kong’s Hang Seng lost 0.3% to 25,345.04, and the Shanghai Composite index edged 0.2% higher, to 3,941.44.

China said its exports jumped 25% year-on-year in August, driven by strong demand for autos and high tech items.

In Australia, the S&P/ASX 200 declined 1% to 8,920.80.

On Friday, the S&P 500 lost 0.4% and the Dow Jones Industrial Average fell 0.5%. The Nasdaq composite gave back 0.3%.

Wall Street will get important updates about inflation this week. The U.S. will release its August report for inflation at the wholesale level, called the Producer Price Index, or the PPI, on Thursday. It provides details on prices for businesses before they pass along the costs to consumers.

On Friday, the U.S. will release its better-known Consumer Price Index, for August. The CPI is closely watched and provides details on price changes for specific grocery items, furniture, and clothing, among other categories. It also details price changes for services ranging from car maintenance to travel and restaurant dining.

In energy markets early Tuesday, Brent crude, the international standard, added 1.4% to $98.40 a barrel as tensions simmered in the six-month U.S. war with Iran.

Benchmark U.S. crude surged 2.6% to $93.88 a barrel.

In other currency dealings, the euro was unchanged at $1.1624.

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AP Business Writers Chan Ho-him in Bangkok and Yuri Kageyama in Tokyo contributed to this report.