China and Hong Kong market indexes rebounded after crude oil prices dropped as much as 3% following the rising possibility of a temporary ceasefire between Israel and Iran.
Middle East tensions escalated rapidly after the U.S. joined Israel's war on Iran and carried out multiple strikes targeting nuclear infrastructure. Japan's indexes declined amid the worry of a wider war in the Middle East and a disruption in global energy supply.
Crude oil prices soared as much as 7% after the U.S. joined Israel's war on Iran. China indexes wavered around the flatline amid worries of global crude oil supply disruptions.
Japan's indexes trimmed weekly gains after Friday's trading. The acceleration in core inflation in May supported the case for the Bank of Japan to continue its rate hike campaign.
Japan's trade balance remained in deficit for the second consecutive month, raising the risk of a recession. Core machinery orders and the Tankan survey showed a weakening outlook for the manufacturing sector.
Rapidly escalating Middle East tensions raised the prospects of crude oil and natural gas supply chain disruptions, as the U.S. mulled joining Israel's war on Iran.
The Bank of Japan held its short-term interest rates steady, citing rising geopolitical uncertainty and lingering uncertainty rooted in the U.S. trade policy.
The Bank of Japan is widely expected to hold rates at the end of a two-day meeting on Tuesday. Shipping companies were in focus after Iran threatened to block the Strait of Hormuz.
China's strong but mixed batch of economic data in May failed to improve market sentiment. Retail sales soared above 6%, supported by the government's trade-in program.
Japan's benchmark indexes declined about 1% amid rising tensions in the Middle East. Crude oil prices surged more than 5%, and Japan's bond yield edged lower.
