SINGAPORE — Asian stock markets were lower Tuesday, with the Tokyo market hit by losses in exporter stocks fuelled by yen strength.

“It’s extraordinarily thin, holiday-affected trade,” said BBY senior institutional trader Peter Copeland in Sydney. “There’s very little buying, on the back of the general malaise over northern hemisphere growth concerns.” He said Monday’s Independence Day holiday in the U.S. was also keeping investors sidelined.

Japan’s Nikkei Stock Average was down 1.7% at 9,098.43, Australia’s S&P/ASX 200 was 0.5% lower, South Korea’s Kospi Composite was off 1.4% and New Zealand’s NZX-50 lost 0.5%.

Dow Jones Industrial Average futures were down 81 points in screen trade.

The Tokyo market was hit hard by losses in exporters’ shares as the yen rose against the euro and the U.S. dollar. The Nikkei earlier touched 9,091.70, its lowest level since Nov. 27, 2009, with all 33 of the Topix Subindexes trading in the red.

Fanuc was down 1.9%, Tokyo Electron fell 2.7%, Sony lost 2.0%, and Toshiba lost 1.8%. Automakers were also weak with Toyota Motor down 0.8%, Nissan Motor off 1.2% and Honda Motor off 1.3%.

“(The) U.S. economy is not sliding into a recession, but markets are becoming excessively jittery,” said Hideyuki Ishiguro, strategist at Okasan Securities.

Financials and miners were dragging down the Australian market.

BHP Billiton was off 1.9% and Rio Tinto fell 1.9%, while among financials, major banks were down between 0.4% and 1.0%. In the property trusts space, Westfield was off 0.9% and Stockland was down 1.6%.

Investors were awaiting the Reserve Bank of Australia’s rate-setting decision at 0430 GMT. The official overnight target is widely expected to be left steady at 4.50% after the RBA’s six rate hikes since October 2009. Analysts will be focussing on whether the bank will retain its declaration in May that rates have now been restored to average levels.

“The RBA may be cognisant of not sounding too alarmed over global developments for fear of pushing the market towards an inappropriate pricing-in of rate cuts,” said Greg Gibbs, currency strategist at RBS in Sydney. “Basically the RBA is likely to deliver a similarly bland statement of wait and see, policy “appropriate for the near term,’” he said.

The Korean market was down across the board, weighed by losses in European stocks Monday.

Technology plays and automakers were down with Samsung Electronics losing 1.4%, LG Display down 1.2% and Hynix Semiconductor off 1.3%. Hyundai Motor fell 1.1% and Kia Motor was off 17%.

In foreign exchange markets, the yen was modestly higher against both the U.S. dollar and the euro, as lingering worries about the global economic recovery encouraged investors to buy the safe-haven Japanese currency. The single currency was fetching ¥109.62 against the yen, from ¥110.02 late Monday in Toronto, and was at $1.2514 against the dollar, from $1.2514. The dollar was buying ¥87.59, from ¥87.75.

“Although not clearly evident overnight, risk aversion continues to linger just below the surface and further (yen) outperformance remains very likely over the short term as investors move into safe-haven currencies,” RBC Capital Markets said in note to clients.

Japanese government bonds were lifted by safe-haven buying fuelled by the Nikkei’s sharp losses. But gains were expected to be limited as traders await an auction of 10-year JGBs later Tuesday, said RuiXue Xu, a strategist at RBS.

Lead September JGB futures were up 0.15 at 141.72 points while the 10-year cash JGB yield was down one basis point at 1.095%.

Spot gold was at $1,205.30 per troy ounce, down $2.65 from Monday’s London close. Nymex August crude oil futures were down 43 cents at $71.71 per barrel on Globex.

Write to Shri Navaratnam at shri.navaratnam@dowjones.com

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