scorecardresearchGlobal Market Wrap: Asia stocks slide as investors lose risk appetite,

Global Market Wrap: Asia stocks slide as investors lose risk appetite, yields rise

Updated: 20 Oct 2022, 07:49 AM IST
TL;DR.

The yield on the 10-year U.S. Treasury note touched a fresh 14-year high, brushing off a weak housing report. U.S. 10-year yields were last up at 4.139%, beyond the 4.136% high it touched earlier.

A person wearing a protective mask stands in front of an electronic stock board showing Japan's Nikkei 225 index as a vehicle passing by at a securities firm Wednesday, Oct. 19, 2022, in Tokyo. Asian stock markets were mixed Wednesday after Wall Street rose on strong corporate profit reports. (AP Photo/Eugene Hoshiko)

A person wearing a protective mask stands in front of an electronic stock board showing Japan's Nikkei 225 index as a vehicle passing by at a securities firm Wednesday, Oct. 19, 2022, in Tokyo. Asian stock markets were mixed Wednesday after Wall Street rose on strong corporate profit reports. (AP Photo/Eugene Hoshiko)

(Reuters) - Asian share markets fell on Thursday as investor fears over a looming recession crimped risk appetite, while Treasury yields rose on expectations that the Federal Reserve will remain aggressive in its interest rate hikes.

Japan's yen crept close to the psychological barrier of 150 per dollar after earlier marking a fresh 32-year low of 149.93.

The yield on the 10-year U.S. Treasury note touched a fresh 14-year high, brushing off a weak housing report. U.S. 10-year yields were last up at 4.139%, beyond the 4.136% high it touched earlier.

"Yields rose to fresh cycle highs and risk appetite soured," said Taylor Nugent, a markets economist at National Australia Bank in Sydney, adding that hawkish commentary from central banks also weighed on sentiment.

Wall Street snapped a two-day streak of gains on Wednesday, while the dollar bounced from two-week lows.

MSCI's broadest index of Asia-Pacific shares outside Japan fell to more than two-year low of 436.0 and was down 1.6% at 437.16,

Australia's S&P/ASX 200 index was 1.12% lower, while Japan's Nikkei opened 1% lower at 26,981.75 on Thursday.

China's stock market opened 0.5% lower as the ruling Communist Party's twice-a-decade congress remains in session this week.

China on Thursday kept its benchmark lending rates unchanged for a second straight month as authorities held off unleashing more monetary stimulus to avoid stark policy divergence with other major economies.

In the currency markets, the U.S. dollar firmed as investors flocked to the safe haven after inflation data across the world raised the prospect of central banks continuing with interest rate hikes.

On Wednesday, Federal Reserve Bank of Minneapolis President Neel Kashkari said job market demand remains strong and underlying inflation pressures probably have not peaked yet.

The U.S. central bank is widely expected to raise rates by 75 basis points for the fourth straight time at its November meeting.

Still, the Fed's "Beige Book" survey of economic activity showed that there was there was some easing in several districts, but firms noted price pressures remained elevated.

The rise in the dollar and yields pushed gold lower, with prices lingering at a three-week trough on Thursday.

The fragile yen has been on a losing streak for 11 straight sessions as of Wednesday's close, and has renewed 32-year lows for the past six sessions. [/FRX]

"The ever-lurking threat of official FX intervention perhaps slowing the pace we might otherwise have seen given higher global rates," National Australia Bank's Nugent said.

Last month, Japan intervened in the foreign exchange market to buy yen for the first time since 1998, in an attempt to shore up the battered currency.

 

First Published: 20 Oct 2022, 07:49 AM IST