[MARKET UPDATE] Asia-Pac stocks begin lower amid higher oil prices as the Middle East conflict continues to threaten oil supply, while markets also brace for anticipated rate hikes from the Fed and BoJ this week

Sessions framed by an oil-supply risk premium alongside a heavy central bank calendar have a familiar shape: energy-sensitive Asian bourses underperform, integrated producers and refiners diverge within the energy complex, and the safe-haven bid shows up in the dollar and the front of the Treasury curve rather than in duration. The transmission channel here is freight, insurance, and physical supply expectations rather than any confirmed disruption, and premia built on threat rather than actual lost barrels have historically faded quickly once supply routes prove intact. The layering of geopolitical risk onto a Fed and BoJ week is the distinguishing feature: an oil-driven inflation impulse cuts against the easing bias markets price into Fed communications, while for the BoJ a risk-off tape and yen strength complicate the case for tightening, so the two events interact rather than simply stack. The pattern in past episodes of this kind is that the central bank outcome, not the geopolitical headline, sets the durable direction, with geopolitics determining the gap at the open. Worth watching are whether physical benchmarks and timespreads corroborate the flat-price move, any confirmation of actual supply interruption versus rhetoric, and whether rate expectations reprice in the direction the oil move would imply.