Asian stock markets were slightly subdued given the U.S. holidays overnight, even as the Japanese yen continued to strengthen against the dollar.

Regional markets on Tuesday lacked cues from New York given Monday's Labor Day holiday, and investors are now looking to U.S. consumer inflation data due Friday.

The consumer price index for August is likely to solidify expectations over whether the U.S. Federal Reserve will hike interest rates at its mid-September meeting.

"Market sentiment remained cautious," analysts at CIMB's Treasury and Markets Research said in a report. They cited factors such as escalating geopolitical tensions.

South Korea's Kospi rose 1.1% and Japan's Nikkei Stock Average added 0.3%, while Hong Kong's Hang Seng Index fell 0.6% and Singapore's FTSE Straits Times Index declined 0.5%.

In foreign exchange markets, the Japanese yen continued to gain ground against the dollar, bolstered by expectations of faster interest-rate increases by the Bank of Japan and the potential for investment inflows into Japanese assets.

Expectations for a quicker pace of rate hikes have mounted since last week, when BOJ policy board member Hajime Takata urged a flexible approach to tightening, noting that the central bank's 2% inflation target had nearly been achieved and that the risk of prices overheating was rising.

The U.S. dollar was recently 0.5% lower at 153.58 yen after earlier touching Y153.51, its lowest intraday level since Feb. 18, according to LSEG data. The yen is now stronger than where it was after the joint intervention by Japanese and U.S. authorities in July.

The Australian dollar fell 0.6% to Y110.80 and the euro dropped 0.4% to Y178.62.

Meanwhile, crude oil futures rose as traders parsed developments in the Middle East.

"Saudi Aramco's oil facilities in Jazan came under fresh attacks on Monday," ANZ Research analysts said, citing a media report.

"The recent escalation of the Middle East conflict has increased the likelihood of a prolonged standoff, punctuated by calibrated military action by the U.S. and Iran," the analysts said. "This could see Persian Gulf supply remain constrained through the rest of 2026," they added.

Front-month West Texas Intermediate crude oil futures rose 1.1% to $92.47 a barrel, and front-month Brent crude oil futures advanced 0.1% to $97.11 a barrel, according to ICE data.