TOKYO - Asian shares were caught in choppy trade on Tuesday as investors remained cautious ahead of a European leaders summit which many believe will not produce any substantive measures to solve the region’s protracted debt crisis, now in its third year.
MSCI’s broadest index of Asia-Pacific shares outside Japan inched up as much as 0.2 percent and slid as low as 0.1 percent. Japan’s Nikkei average fell 0.5 percent to a one-week low. “Sentiment is not one-sidely bearish, as low volatility in some local equities markets suggests relative stability, but the choppy trade reflects extreme caution before the European summit,” said Hirokazu Yuihama, a senior strategist at Daiwa Securities in Tokyo. “Investors want to see what direction the summit’s outcome will point to. It’s very unclear what specific agreements may actually be made, there could be compromises on forward-looking measures, so investors can’t be entirely pessimistic,” he said. The euro edged up 0.2 percent at $1.2523, off a two-week low of $1.24713 hit on Monday when growing concern over the June 28-29 EU summit sent risk assets and the single currency sinking, while pushing up Italian and Spanish debt yields as contagion risks weighed on investor sentiment. The two-day summit in Brussels will be the 20th time EU leaders have met to try to resolve a crisis that has spread across Europe since it began in Greece in early 2010.