Asia markets stumble, with Shanghai down 0.8%, Nikkei down 0.9%

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Asian markets traded broadly lower on Tuesday, led by declines in Japan and China, as investors await further cues from next month's U.S. Federal Reserve monetary policy meeting.

The Nikkei 225 closed down 0.94 percent, or 155.84 points at 16,498.76, amid pressure from fresh strength in the yen against the dollar. Across the Korean Strait, the Kospi ended lower 0.9 percent, or 17.57 points at 1,937.68.

Australia's S&P/ASX 200 closed down 0.44 percent, or 23.343 points at 5,295.6, weighed by a 1.28 percent decline in the energy sub-index.

Chinese mainland markets fell, with the Shanghai composite closed down 0.76 percent, or 21.604 points to 2,822.041, while the Shenzhen composite settled down 0.9 percent, or 16.389 points to 1,804.603.

In Hong Kong, the Hang Seng index closed up 0.11 percent, or 21.4 points at 19,830.43.

Stateside, the Dow Jones industrial average finished down 0.05 percent, the S&P 500 was down 0.21 percent and the Nasdaq composite ended 0.08 percent lower.

"The talk on the trading floors this morning centers on the limited moves in markets, although some will welcome this, notably the Fed who have had a hand in creating these conditions," said Chris Weston, chief market strategist at spreadbetter IG in a morning note.

Weston added that the relatively soft finish from both the Dow and the S&P 500 was an indication of the lack of immediate catalysts in markets.

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In the currency markets, the Japanese yen strengthened, with the dollar-yen pair at 109.22 as of 12:50 p.m. HK/SIN on Tuesday, compared with levels a tad above 110 in the Asia session Monday. Reuters had reported earlier that Japan's Finance Minister said that the pair moving by 5 yen within two days would be considered a "one-sided move, but that Japan doesn't plan to devalue the yen sharply or consistently.

The yen's rise overnight came despite weaker economic data, with figures from the Japanese finance ministry on Monday showing exports in the country for April dropped 10.1 percent on-year in April, while imports dropped 23 percent on-year.

Kathy Lien, managing director of foreign exchange strategy at BK Asset Management said in a note that the disappointing data should have driven on the dollar/yen pair up on the premise that "fresh monetary and/or fiscal stimulus will be necessary." But the pair fell following warnings against intervening in the currency market from the U.S., she said.

"Technically, Japan doesn't need anyone's approval for currency intervention, but if they were reluctant to step into the market when dollar/yen dropped to 106, they are definitely not considering the idea at 109," said Lien.

Down Under, Reserve Bank of Australia Governor Glenn Stevens said to the Trans-Tasman Business Circle that the central bank is committed to a flexible inflation-targeting monetary policy, reported Reuters.

The Australian dollar traded at $0.7194, and Weston said the Aussie needed to close "below key support at $0.7210 for $0.7000 to come into play."

Oil prices also retreated during Asian hours, with global benchmark Brent futures down 0.52 percent at $48.10 a barrel as of 12:57 p.m. HK/SIN. U.S. crude futures dropped 0.4 percent to $47.89 a barrel.

Energy plays were mostly lower, with Santos shares down 1.88 percent, Oil Search down 1.51 percent and Inpex lower by 1.83 percent.