NEW YORK / SYDNEY (Reuters) – Asian stocks rose to a one-month low on Friday as rising U.S. Treasury yields sent stock investors down again as they lifted the dollar to a three-month high, which again dragged the Japanese yen.
Energy markets have also not been spared volatility, with oil prices rising sharply overnight after the Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed to maintain their supply cuts in April mostly as they await a stronger recovery. in the question of the coronavirus pandemic. [O/R]
Australian shares fell more than 1%, Nikkei shares in Japan fell 1.6% and shares in Seoul fell 1.4%. Chinese stocks were in the red with the bluechip CSI300 index of 1.5%.
It sent MSCI’s widest index of Asia-Pacific stocks outside Japan to 684.52, the lowest since February 1.
E-Mini S&P futures were 0.5% lower.
US equities fell on Thursday after Federal Reserve Chairman Jerome Powell disappointed some investors by not indicating that the Fed could sharpen long-term bond purchases to keep interest rates longer.
The tech-savvy Nasdaq Composite tumbled 2.1%, down about 10% from its Feb. 12 record, putting it in a correction area. [.N]
Although Powell made it clear that the Fed would not soon change its ultra-loose stance on monetary policy, some analysts were still concerned that rising Treasury yields could mean higher borrowing costs, which could limit the fragile economic recovery in the US .
“The market has apparently been looking for Powell to push back the recent rise in yields harder,” said Ray Attrill, head of the National Australia Bank’s forex strategy.
“The volatility seen in local interest rate markets yesterday, with another large rise in long-term rates and government bond yields, once again provides the scene for a turbulent market today if overnight developments are a guideline.”
Bond investors with a clumsy view of Treasuries paid homage to Powell’s remarks and sold the notes. The yield on 10-year treasury has climbed to above 1.5% to 1.5727%, but last week it is still below an annual high of 1.614%. [US/]
The yield curve, a measure of economic expectations, increased in rising yields, with the gap between two and ten-year yields widening overnight by another 6.3 basis points.
Rising treasury yields boost demand for the dollar. The dollar index rose to a three-month high of 91,734. [USD/]
A stronger dollar hampered the yen. Early Friday, the yen fell to as low as 107.97, the lowest since July 1, although it reduced losses and was last at 107.85.
The euro also stumbled through a stronger dollar, with the common currency sluggish at $ 1.1960.
Climbing yields and dollar strength boosted gold prices, which fell to a nine-month low when investors sold the precious metal to reduce the cost of owning the non-yields. [GOL/]
Spot gold fell another 0.2% early Friday to $ 1,692.26 per ounce, trading below $ 1,700 for the first time since June 2020.
Oil prices boosted profits early Friday after rising overnight.
U.S. crude futures climbed 17 cents, or 0.3 percent, to $ 64, which held below a 13-month high on Thursday. Brent crude rose 10 cents to $ 66.84 a barrel.
In the cryptocurrency market, bitcoin declined 4% on Friday to $ 46,422.
Reporting by Koh Gui Qing in New York and Swati Pandey in Sydney; Edited by Sam Holmes and Christian Schmollinger