TOKYO (AP) -- Global shares were mostly lower Tuesday following a national holiday in the U.S, while oil prices surged following an attack on an oil facility in the capital of the United Arab Emirates that killed at least three people.
Benchmark U.S. crude rose $1.44, or 1.7%, to $85.26 a barrel in electronic trading on the New York Mercantile Exchange. It gained $1.70 to $83.82 per barrel on Monday.
Brent crude, the basis for pricing international oil, added $1.05 to $87.53 a barrel.
Satellite photos obtained by The Associated Press on Tuesday appeared to show the aftermath of the attack, which was claimed by Yemen's Houthi rebels.
In Europe, France's CAC 40 dropped 1.2% in early trading to 7,117.76, while Germany's DAX slipped 1.0% to 15,767.35. Britain's FTSE 100 was down 0.7% at 7,555.82. The future for the Dow industrials was down 0.6% at 35,577.00. The S&P 500 future fell nearly 1.0% to 4,610.50.
The 2-year Treasury rose above 1%, adding to expectations the U.S. Federal Reserve will soon raise rates to counter inflation.
Rising bond yields tend to put pressure on stocks, as investors reassess their asset allocations and take a closer look at share prices, especially higher valued ones.
The yield on the 10-year Treasury was at 1.84% on Tuesday. It also has risen in recent days.
"Overall sentiments may still lean towards some cautiousness, as some market participants may refrain from taking on more risks. This comes amid a quiet U.S. calendar ahead and the absence of comments from Fed officials going into the FOMC meeting next week," Yeap Jun Rong, a market strategist at IG in Singapore, said in a commentary.
The Bank of Japan wrapped up a two-day policy meeting with no major changes. Its benchmark interest rate remains at a longstanding minus 0.1%.
Price increases in Japan have been less pronounced than it is in the U.S. and some other nations, though the central bank raised its inflation forecast for the fiscal year that begins in April to 1.1% from a previous estimate of 0.9%.
The super-easy monetary policy of the Japanese central bank is expected to stay unchanged for the time being, as the nation grapples with surging cases of COVID infections set off by the omicron variant.
The recent sudden increase in reported cases is likely to crimp economic activity. Japan, which has not had any pandemic lockdowns, has gone through periods of restrictions to curb the spread of COVID-19, mostly having restaurants and bars close early. Such restrictions are expected to expand this week to about a third of the nation, including Tokyo.
Japan's benchmark Nikkei 225 fell 0.3% to 28,257.25. Australia's S&P/ASX 200 lost 0.1% to 7,408.80. South Korea's Kospi dropped 0.9% to 2,864.24. Hong Kong's Hang Seng slipped 0.4% to 24,112.78, while the Shanghai Composite rose 0.8% to 3,569.91.
In currency trading, the U.S. dollar rose to 114.71 Japanese yen from 114.62 yen. The euro cost $1.1397, down from $1.1410.