HONG KONG: Shares in Asia were mixed on Wednesday with benchmark US Treasury yields near multi-year highs as investors turned to both stocks and bonds amid concerns about the long-term impact of higher interest rates. But expressed displeasure.
The dollar index rose further after hitting a 10-month high on Tuesday, while the Japanese yen edged closer to a key level where Japanese authorities are seen as potentially intervening to strengthen the currency. .
Official data on Wednesday showed profits at China’s industrial companies fell 11.7 percent in the first eight months from a year earlier. In Australia, inflation rose in August due to rising fuel prices, but the gain was in line with expectations.
The Bank of Thailand’s decision on rates will come later today.
At the start of the Asian trading day, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1 percent. The index is down 3.7 percent so far this month. U.S. stock futures, the S&P 500 e-minis, were up 0.13 percent.
Australian shares were down 0.25 percent, while Japan’s Nikkei stock index slipped 0.47 percent.
China’s blue-chip CSI300 index was 0.41 percent higher in early trade. Hong Kong’s Hang Seng index rose 0.8 percent.
On Tuesday, Wall Street’s major stock indexes followed declines in Asian and European equities as investors continued to digest the Federal Reserve’s signal last week that it would keep rates higher for longer than investors previously expected.
The Dow posted its biggest one-day percentage drop since March, while all three major averages ended at their lowest in three months.
The Dow Jones Industrial Average fell 1.14 percent, the S&P 500 fell 1.47 percent and the Nasdaq Composite fell 1.57 percent.
Among currencies, the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, rose 0.085 percent to 106.3 after hitting 106.21 on Tuesday, its highest since Nov. 30. The European single currency was down 0.1 per cent on the day at $1.0564, a loss of 2.56 percent in a month.
The Japanese yen remained weak against the greenback at 149.06 per dollar. The dollar’s strength, especially against the yen, has kept traders alert for intervention to boost the Japanese currency, especially after Finance Minister Shunichi Suzuki said no option was off the table.
The 150 yen per dollar level is seen by financial markets as a red line that will prompt Japanese authorities to take action, as they did last year.
“USD/JPY traded in a fairly tight range overnight and is currently trading above 149. Higher US Treasury yields and recent dovish comments from Bank of Japan (BOJ) officials helped keep the USD/JPY trading in a fairly tight range overnight,” CBA analysts said in a note. “Put pressure on USD/JPY.” “We see a high risk that the BOJ will intervene soon to prop up the JPY.”
Benchmark 10-year Treasury yields have surged to a 16-year high in the wake of the Federal Reserve’s tougher long-term rate outlook last week. The yield reached 4.5274 percent that day, while its US close on Tuesday was 4.558 percent.
The two-year yield, which rises with traders’ expectations of higher fed funds rates, hit 5.0603 percent, compared with 5.077 percent in the US.
Oil prices edged higher after hitting a two-week low early in Tuesday’s session as investors weighed expectations of tight supply versus demand concerns stemming from an uncertain economic outlook.
US crude oil rose 0.34 percent to $ 90.7 per barrel. Brent crude rose to $ 94.26 per barrel.
There was a little more gold. Spot gold traded at $1901.204 an ounce.
(Editing by Jamie Freed)