GLOBAL MARKETS: Asian stocks set for record-breaking quarter; dollar sinks gold and yen

SINGAPORE — Asian stock markets traded mixed on Tuesday as investors wrapped up a strong quarter marked by gains in technology shares, while a stronger U.S. dollar pushed the Japanese yen to a four-decade low.

Japan's benchmark Nikkei index was little changed in early trading but remained on track to post a record quarterly gain of more than 36%. South Korea's KOSPI slipped 1% on the day, though it was still set to finish the second quarter with a nearly 65% gain, driven largely by semiconductor stocks.

Oil prices remained stable, with Brent crude trading at around $72.49 per barrel, returning to levels seen before the recent Middle East conflict despite ongoing tensions surrounding a fragile ceasefire.

Analysts said lower oil prices are supporting expectations for stronger global economic growth and improving corporate earnings.

U.S. stock indexes closed higher overnight, while futures were mostly flat during Asian trading. The U.S. dollar continued to strengthen, reflecting changing expectations that the Federal Reserve may keep interest rates higher for longer due to resilient economic growth and persistent inflation.

The stronger dollar contributed to gold's biggest quarterly decline in more than a decade and pushed the Japanese yen to as low as 162.41 per dollar, increasing market speculation that Japanese authorities could intervene to support the currency.

Japan's Finance Minister Satsuki Katayama said the government remains prepared to take appropriate action if necessary.

The dollar index was up 1.3% for the quarter, although the euro recovered above the $1.14 level this week. Investors are now focused on upcoming U.S. economic data, including employment figures due Thursday, as well as remarks from Federal Reserve Chair Kevin Warsh scheduled for Wednesday.

Economic data released Tuesday showed China's manufacturing sector expanded in June, supported by strong high-tech exports. Investors are also monitoring European inflation figures and U.S. consumer confidence and job openings data later in the day.

Across the region, Taiwan's benchmark index was on track for a quarterly gain of more than 40%, continuing to benefit from strong demand for semiconductor companies. In contrast, Hong Kong's Hang Seng Index remained one of the region's weakest performers and was headed for a quarterly decline of about 7.5%.

Despite the rally in Asian technology stocks, foreign investors continued selling shares in several markets, particularly South Korea, where net outflows reached $17.3 billion this year, according to BNY. Analysts said portfolio rebalancing and profit-taking, rather than renewed institutional buying, have driven much of the selling.

Elsewhere, Europe's STOXX index was on pace for a quarterly gain of about 9%, while China's CSI300 blue-chip index was up around 10%, attracting investor interest as they seek to diversify beyond technology stocks.

Market strategists said investors are increasingly looking at sectors such as defense and renewable energy as they broaden their portfolios beyond the technology sector. -Reporting by Tom Westbrook; Editing by Muralikumar Anantharaman/Reuters