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Asian stock markets declined on Tuesday and US futures traded lower ahead of key US employment and inflation data that could influence the future path of interest rates.

Japan’s Nikkei 225 fell 1.2 per cent to 49,544.21, after preliminary factory data showed manufacturing activity slowing slightly. The S&P Global Flash Purchasing Managers’ Index for Japan rose to 49.7 in December from 48.5 in November, remaining below the 50 mark that separates expansion from contraction.

Investors are closely monitoring Japanese economic indicators ahead of the Bank of Japan’s policy meeting on Friday, where an interest rate hike is widely anticipated—an outcome that could unsettle global bond and cryptocurrency markets.

Chinese equities also retreated after November data released on Monday came in weaker than expected. Retail sales grew just 1.3 per cent year-on-year, their slowest pace since the pandemic in 2022, while lending and investment activity also softened.

“Overall, the data confirms a loss of momentum into the year-end and is consistent with our forecast of growth moderating to around 4 per cent in the final quarter,” Tan Boon Heng of Mizuho Bank said in a note.

Hong Kong’s Hang Seng Index slid 1.9 per cent to 25,139.16, while the Shanghai Composite dropped 1.2 per cent to 3,820.85.

South Korea’s Kospi declined 1.5 per cent to 4,027.83, Taiwan’s Taiex fell 1.1 per cent, and Australia’s S&P/ASX 200 lost 0.6 per cent to 8,583.00.

In US after-hours trade, shares of robotic vacuum maker iRobot plunged 9.3 per cent after the company filed for Chapter 11 bankruptcy protection, extending its steep losses following a nearly 73 per cent drop on Monday. The company said it does not expect disruptions to its products as it undergoes restructuring.

On Wall Street overnight, the S&P 500 slipped 0.2 per cent to 6,816.51, the Dow Jones Industrial Average edged down 0.1 per cent to 48,416.56, and the Nasdaq Composite fell 0.6 per cent to 23,057.41.

Artificial intelligence-linked stocks were mixed. Nvidia rose 0.7 per cent, while Oracle declined 2.7 per cent, following last week’s sharp losses. Broadcom dropped 5.6 per cent, amid concerns that heavy investment in AI infrastructure may not deliver sufficient returns.

Markets are now focused on major US economic releases this week. Economists expect Tuesday’s November jobs report to show a net addition of 40,000 jobs, with the unemployment rate steady at 4.4 per cent, near its highest level since 2021. Inflation data due Thursday is forecast to show consumer prices rising 3.1 per cent year-on-year in November.

In early commodity trade, US crude oil fell 32 cents to $56.50 per barrel, while Brent crude slipped 33 cents to $60.23.

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In currency markets, the US dollar eased to 154.81 yen, while the euro slipped to $1.1753.