Asia stocks waver as yen surges, Iran warns of retaliation

The yen surged on Tuesday, while Asian markets struggled for direction as a mixed batch of regional economic data and fresh Iranian threats in the Persian Gulf drove oil prices and bond yields higher.

Japan's Nikkei 225 fluctuated between gains and losses before edging up 0.2%, as the yen jumped as much as 0.6% to 153.51, its strongest level since February 18.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2%, led by a 1.2% gain in the KOSPI. S&P 500 e-mini futures were down 0.1% after a holiday in the U.S. on Monday.

"While U.S. Labor Day made for a somewhat quieter start to the week for trading volumes, the weekend’s tit-for-tat strikes between the U.S. and Iran continued to put upward pressure on oil prices, acting as a drag on risk sentiment more broadly," Westpac analysts said.