Updates prices, adds European futures in paragraph 5

By Gregor Stuart Hunter

SINGAPORE, June 23 (Reuters) - Asian stocks and oil prices fell on Tuesday after the U.S. waived sanctions on Iran, while traders grappled with rising expectations the Federal Reserve may take more aggressive action to tackle inflation later this year.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS sank 2.9%, while S&P 500 e-mini futures EScv1 slipped 0.9%. Brent crude LCOc1 slid 1.22% to $76.95 per barrel.

Japan's Nikkei 225 .N225 sank 3%, while South Korea's Kospi index .KS11 plunged 8.1%.

"These are far from dull markets," said Chris Weston, head of research at Pepperstone Group in Melbourne. "The former generals of the market appear to have lost momentum, and investors are rotating into other areas of the market that are more defensive, less AI-focused and offer more predictable cash flows."

In early European trades, the pan-region Euro Stoxx 50 futures STXEc1 were down 0.96%, German DAX futures FDXc1 fell 1%, FTSE futures FFIc1 were down 0.95%.

Stocks on Wall Street moved lower overnight, with the S&P 500 .SPX down 0.4% and the Nasdaq Composite .IXIC slipping 1.3%, dragged by declines in megacap technology stocks including Alphabet GOOGL.O and SpaceX SPCX.O.

Oil prices settled more than 3% lower as supply concerns eased after U.S. Vice President JD Vance said progress had been made in talks with Iran and that the Strait of Hormuz was open.

YEN NEAR 40-YEAR LOW

In currency markets, the yen JPY= was flat against the dollar at 161.665 yen, again approaching its weakest levels in 40 years after a volatile trading session in the U.S. overnight.

Japan's Finance Minister Satsuki Katayama said on Tuesday she held an online meeting with U.S. Treasury Secretary Scott Bessent a day earlier to discuss global financial markets, as concerns mount over sharp currency swings.

Sterling GBP= weakened 0.1% to $1.3234 after British Prime Minister Keir Starmer said on Monday he would resign, paving the way for what is expected to be an orderly transfer of power to frontrunner Andy Burnham.

The U.S. dollar index =USD, which measures the greenback's strength against a basket of six currencies, rose 0.07% to 101.08, close to its highest since May 2025.

Traders are grappling with expectations of an accelerated schedule of rate hikes by a more aggressive Fed under the leadership of new Chair Kevin Warsh.

Fed funds futures are pricing an implied 54% probability of at least two 25-basis-point hikes before the end of the year, compared with a 15.2% chance a week ago, according to the CME Group's FedWatch tool.

The yield on the U.S. 10-year Treasury bond fell 0.61 basis points to 4.501%.

Gold XAU= fell 1.75% to $4,118.55 an ounce. In cryptocurrency markets, bitcoin BTC= declined 1.56% to $63,368.73, while ether ETH= declined 1.17% to $1,712.74.