Asian stocks stalled on Tuesday as Wall Street shares lost steam, while the dollar sagged on the back of declining US yields. Investors were focused on US inflation data due later in the day (1230 GMT) for clues on the pace of Federal Reserve interest rate rises this year.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed by mid-morning. The index had surged 1.5 per cent on Monday following firm US jobs numbers on Friday, while low wage growth eased concerns about inflation and faster central bank rate hikes. But a mixed performance by US shares overnight cooled investor risk appetite in Asia.

The S&P 500 and the Dow slipped on Monday as the US tariffs signed into law last week weighed on industrials, while gains in tech stocks boosted the Nasdaq to a new record high. Japan's Nikkei shed 0.2 per cent , with shares in steelmakers and automakers still battered by concerns about US tariffs on imported steel and aluminium. Some market participants say a political scandal engulfing Japanese Prime Minister Shinzo Abe's government is raising doubts about his ability to pursue economic reform, undermining stock market sentiment.

Australian shares lost 0.7 per cent , while Shanghai dipped 0.1 per cent. South Korea's KOSPI was effectively flat, faring better as major tech shares such as SK Hynix and Samsung Electronics rose following gains by their US peers. “Concerns towards trade conflict stemming from US tariffs continue to linger in the background, capping risk appetite, pushing Treasury yields lower which in turn weighing on the dollar,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo. “That said, there are still bright spots that bode well for broader risk sentiment, as the Nasdaq's gains shows.”

Separately, US President Donald Trump on Monday blocked Singapore-based semiconductor maker Broadcom Ltd's takeover bid of Qualcomm Inc on grounds of national security, ending what would have been the technology industry's biggest deal ever.

Currency market

The dollar index against a basket of six major currencies was flat at 89.891 after shedding about 0.2 per cent overnight. The euro was a shade higher at $1.2337, adding to overnight gains of 0.25 per cent. The US currency was down 0.05 per cent at 106.350 yen as the renewed political scandal in Japan pushed it off last week's peak above 107.00. The benchmark 10-year US Treasury note yield stood little changed at 2.877 per cent. The yield declined by 2.5 basis points overnight.

Commodities

In commodities, crude oil prices extended losses after sliding the previous day amid ongoing concerns over rising US output. US crude futures lost 0.3 per cent to $61.19 per barrel after losing 0.8 per cent the previous day. Brent fell 0.3 per cent to $64.76 per barrel.

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