Overnight

The Nikkei overnight was trading lower, appently putting an end to a six-day run of market gains. The KOSPI was also down 0.2% and the Shanghai Composite Index slipped 0.3% lower as Asian shares traded mixed. The Hong Kong Hand Aend rallied 0.7%.

A sharp rise in the U.S. dollar sent a cautious message to investors ahead of Japanese earnings reports. According to the WSJ, "The focus in Japan is now switching from expectations of more policy easing to caution ahead of the coming earnings season, with companies likely hurt by a strong local currency."

According to the WSJ, Elsewhere in the region, Australia’s S&P/ASX 200 recovered from early weakness and was trading up 0.6%, thanks to higher commodity prices. With the exception of aluminum, copper, nickel and zinc prices recovered. The rise in the dollar had led to weakness in commodity prices earlier in the day.

Earlier in the session the People's Bank of China upset the market applecart by setting the yuan stringer against the U.S. dollar despite the dollar's overnight strength. Some claim the POB's action was a sign to show the government was not not trying to boost its competitiveness by weakening the yuan. Meanwhile, the International Monetary Fund cut its global economic growth outlook for 2016 on Tuesday, citing the uncertain fallout of the Brexit vote. It expects the world economy to grow 3.1% this year, down 0.1 percentage point from the outlook in April. However, it seemed to have little impact on markets, the Journal noted.

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