Asia-Pacific markets traded mixed in early Asian trading on Monday as investors grew increasingly cautious over prospects for diplomatic progress in the Middle East.
By 11:35 am AEST (1:35 am GMT), Australia's S&P/ASX 200 was down 0.5%, while Japan's Nikkei 225 gained 2% and South Korea's KOSPI 200 rose 0.5%.
In Japan, Bank of Japan policymakers warned of rising inflation risks that could require a faster-than-expected pace of interest rate increases, according to a summary of opinions from the central bank's July meeting.
"Given we must pay attention to the risk of an inflation overshoot more than before, the pace of rate hikes could be faster than markets expect," one member said, according to the summary released on Monday.
Another member said the focus of monetary policy has shifted away from efforts to push up underlying inflation to the BOJ's target of 2%, towards preventing it from overshooting.
"The risk of waiting is no longer marginal. We must accelerate the pace of adjustment to the degree of monetary accommodation," the member said, calling for a faster pace of rate hikes.
Separately, Japan recorded its first current account deficit in 17 months in June, according to data from the finance ministry.
The deficit was 92.3 billion yen, compared with expectations for a surplus of 1.52 trillion yen, as increased overseas investment in Japanese markets boosted dividend payments.
In the U.S. on Friday, major benchmarks finished higher, with the Dow gaining 0.3% and the S&P 500 rising 0.6% to a record high. The Nasdaq fell 0.1%.
In commodities, ICE Brent crude rose 1.3% to US$83.55 a barrel on Friday, while spot gold gained 2.4% to US$4,341.03 an ounce.
In China, the SSE Composite Index rose 1% to 3,940.0 and the CSI 300 gained 0.9% to 4,694.4. Hong Kong's Hang Seng Index advanced 0.5% to 25,668.0, while India's BSE Sensex fell 0.6% to 78,499.2.
European markets also finished higher on Friday. The UK's FTSE 100 gained 0.3% to 10,901.1, Germany's DAX rose 0.7% to 26,319.5 and France's CAC 40 added 0.2% to a record 8,714.9.
