* Yen slightly firmer, Nikkei resumes rally to clear 70,000
mark
* BOJ raises interest rates to 1% as anticipated in 7-1 vote
* RBA decision due at 0430 GMT, no change expected
(Adds Bank of Japan decision)
By Gregor Stuart Hunter
SINGAPORE, June 16 (Reuters) - Asian stocks made cautious
gains on Tuesday after a rally in the previous session on news
of a U.S.-Iran peace deal, while investors assessed a widely
expected Bank of Japan rate increase to a 31-year high.
The yen edged up 0.1% to 160.215 against the dollar and the
Nikkei 225 jumped 0.9% to a new all-time peak above
70,000 after the Japanese central bank voted 7-1 to hike its
benchmark policy rate to 1%, levels last seen in 1995.
S&P 500 e-mini futures reversed early losses to
trade flat, while MSCI's broadest index of Asia-Pacific shares
outside Japan was up 0.4%, with Korean shares
rising 2.3%. Stocks in Hong Kong weighed on the
benchmark after weaker-than-expected retail sales and
fixed-asset investment data from China.
Markets settled into a more measured tone on Gulf
developments as the initial excitement over the preliminary
agreement between Washington and Tehran began to fade.
Oil prices, which finished at a three-month low overnight,
reflected the cautious stance, with Brent crude futures
sliding 0.3% to $82.90 a barrel. Shippers in Asia and Europe
said rebuilding confidence in resuming transit through the
Strait of Hormuz could take weeks.
While U.S. President Donald Trump's announcement of a deal
with Iran drew initial investor relief on Monday, it also puts
Washington on a collision course with Israel.
"While it is an important diplomatic breakthrough that
should remove a key source of market volatility, the durability
of the deal is likely to be tested in the future," Westpac
analysts wrote in a research note. "Many sticking points,
including the fate of Iran's nuclear programme, were left to be
resolved in subsequent negotiations."
WALL STREET RALLY
Overnight on Wall Street, stocks and bonds rallied on
optimism over the deal. The S&P 500 jumped 1.7% and the
Nasdaq Composite surged 3.1%, while the Dow Jones
Industrial Average and the STOXX 600 both closed at
record highs.
Beyond geopolitics, traders are also awaiting a decision
from the Reserve Bank of Australia, which is expected to pause
its tightening cycle when it meets later on Tuesday, according
to a Reuters poll of economists.
Later in the day, Bank of Japan Deputy Governor Shinichi
Uchida will hold a press briefing to explain the central bank's
decision, which Governor Kazuo Ueda will miss because he is
undergoing medical treatment.
"We do not anticipate any major changes to the Bank's
assessment of current conditions," analysts from Mitsubishi UFJ
wrote in a research note.
"We expect Deputy Governor Uchida's press conference,
including the rationale he presents for the rate-hike decision,
will be based largely on Governor Ueda's June 3 speech," the
note added. "Mr. Uchida is also likely to follow the governor's
remarks when discussing future policy decisions."
The U.S. dollar index, which measures the greenback's
strength against a basket of six currencies, held steady at
99.70, firmly within the tight trading channel in which it has
sat for the past three sessions.
The yield on the U.S. 10-year Treasury bond was up 0.4 basis
point at 4.471%. Gold moved 0.4% higher to $4,321.22 an
ounce.
In early European trades, pan-region futures were
down 0.1%, German DAX futures were off 0.2% and FTSE
futures edged 0.1% lower.
In cryptocurrency markets, bitcoin was down 0.8% at
$65,938.29, while ether slumped 2.1% to $1,777.02.