Asian Stock Markets
Asia stocks pulled further back from record highs on Wednesday as the
recent rise in global bond yields weighed on equities, while the dollar
steadied ahead of the Federal Reserve’s policy decision.
In his first State of the Union address since becoming U.S. President, Donald Trump urged Republicans and Democrats to work toward compromises on immigration and infrastructure and implement legislation that generates at least $1.5 trillion for new infrastructure investment. Market reaction to the address was limited.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added to the previous day’s losses and dipped 0.2 percent, after reaching a record high on Monday.
South Korea's KOSPI .KS11 rose 0.3 percent and Japan's Nikkei .N225 dropped 0.1 percent.
Hong Kong's Hang Seng .HSI shed 0.55 percent Shanghai .SSEC retreated 0.6 percent.
Wall Street, which has recently hit a succession of record peaks, has led a global equities rally over the past year thanks to strong world growth fuelling higher corporate earnings and stock valuations.
But the recent surge in U.S. long-term bond yields to near four-year highs have poured cold water on the rally.
U.S. stocks fell for a second straight day on Tuesday, with the Dow registering its biggest two-day drop since September 2016, pressured by healthcare stocks and rising bond yields. [.N]
Higher yields are seen hurting equities as they increase borrowing costs by companies and reduce their risk appetite. Higher yields also present a fresh alternative to investors, who may choose to allocate some of their money from equities to bonds.
The U.S. Treasury 10-year note US10YT=RR yield touched its highest in nearly four years overnight at 2.733 percent, while 30-year bond yield US30YT=RR climbed to its highest since May 2017.
Yields rose after the start of the Federal Reserve’s two-day meeting on Tuesday, which could offer more clues on the central bank’s economic and rate hike outlook.
The greenback failed to draw much support from higher Treasury yields as the risk-averse mood favoured its peers like the yen.
The dollar was a shade higher at 108.900 yen JPY=. It briefly popped up to 109.095 after the Bank of Japan increased its buying of JGBs of three- to five-year maturities at a regular debt-purchasing operation, a move seen as a warning shot against further rises in JGB yields. [JP/]
The euro nudged up 0.15 percent to $1.2420 EUR=, adding to modest overnight gains.
The dollar index against a basket of six major currencies .DXY was at 89.106, having crawled away from a three-year low of 88.438 set on Friday.
In his first State of the Union address since becoming U.S. President, Donald Trump urged Republicans and Democrats to work toward compromises on immigration and infrastructure and implement legislation that generates at least $1.5 trillion for new infrastructure investment. Market reaction to the address was limited.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS added to the previous day’s losses and dipped 0.2 percent, after reaching a record high on Monday.
South Korea's KOSPI .KS11 rose 0.3 percent and Japan's Nikkei .N225 dropped 0.1 percent.
Hong Kong's Hang Seng .HSI shed 0.55 percent Shanghai .SSEC retreated 0.6 percent.
Wall Street, which has recently hit a succession of record peaks, has led a global equities rally over the past year thanks to strong world growth fuelling higher corporate earnings and stock valuations.
But the recent surge in U.S. long-term bond yields to near four-year highs have poured cold water on the rally.
U.S. stocks fell for a second straight day on Tuesday, with the Dow registering its biggest two-day drop since September 2016, pressured by healthcare stocks and rising bond yields. [.N]
Higher yields are seen hurting equities as they increase borrowing costs by companies and reduce their risk appetite. Higher yields also present a fresh alternative to investors, who may choose to allocate some of their money from equities to bonds.
The U.S. Treasury 10-year note US10YT=RR yield touched its highest in nearly four years overnight at 2.733 percent, while 30-year bond yield US30YT=RR climbed to its highest since May 2017.
Yields rose after the start of the Federal Reserve’s two-day meeting on Tuesday, which could offer more clues on the central bank’s economic and rate hike outlook.
The greenback failed to draw much support from higher Treasury yields as the risk-averse mood favoured its peers like the yen.
The dollar was a shade higher at 108.900 yen JPY=. It briefly popped up to 109.095 after the Bank of Japan increased its buying of JGBs of three- to five-year maturities at a regular debt-purchasing operation, a move seen as a warning shot against further rises in JGB yields. [JP/]
The euro nudged up 0.15 percent to $1.2420 EUR=, adding to modest overnight gains.
The dollar index against a basket of six major currencies .DXY was at 89.106, having crawled away from a three-year low of 88.438 set on Friday.
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