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Asian Stocks Decline as U.S. Treasury Yields Climb: Markets Wrap

Andreea Papuc
A pedestrian is reflected in an electronic stock board outside a securities firm in Tokyo, Japan, on Tuesday, Feb. 6, 2018. Japan’s blue-chip Nikkei 225 Stock Average entered a correction as the nation’s shares posted the biggest decline since November 2016, following U.S. peers lower amid rising concern that inflation will force interest rates higher. Photographer: Noriko Hayashi/Bloomberg

Stocks in Asia followed their American counterparts lower as geopolitical developments and rising benchmark U.S. yields spurred a return of risk aversion.

Equities in Japan and Korea were lower after U.S. stocks halted a four-day rally with the steepest slide in almost two weeks. Australian shares bucked the trend. Earlier, yields on 10-year Treasury notes rose to 3.07 percent, the highest since 2011, after upbeat U.S. retail sales data fueled bets the Federal Reserve may raise interest rates three more times this year. Bloomberg’s dollar index steadied close to a 2018 high. In emerging-markets, equities dropped the most since March and currencies slumped the most in a year.

Risk aversion spread across asset classes as investors -- already uncomfortable with rising yields and a strong dollar -- grappled with trade, growth, and geopolitical worries. Fresh uncertainty about the U.S.-North Korea summit, violence in the Middle East, the U.S.-China trade spat, and global growth concerns are fueling negative sentiment.

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Elsewhere, established safe-haven assets failed to ignite, despite the gloomy sentiment. Gold traded below $1,300 an ounce for the first time since December and the yen dropped.

Terminal users can read more in our markets live blog.

These are some key events to watch this week:

  • Chinese Vice Premier Liu He is expected in Washington for more trade talks.
  • European Union Chief Brexit negotiator Michel Barnier briefs European affairs ministers on the status of talks with the U.K.
  • U.K. Prime Minister Theresa May meets with her Brexit cabinet Tuesday to discuss plans for a post-withdrawal customs union.
  • U.S. industrial production numbers are due this week.

These are the main moves in markets:

Stocks

  • The MSCI Asia Pacific Index fell 0.1 percent as of 9:21 a.m. Tokyo time.
  • Topix index fell 0.2 percent.
  • Kospi index fell 0.4 percent.
  • Australia’s S&P/ASX 200 Index rose 0.1 percent.
  • Futures on the S&P 500 Index fell less than 0.05 percent.


Currencies

  • The Bloomberg Dollar Spot Index rose less than 0.05 percent.
  • The Japanese yen rose less than 0.05 percent to 110.30 per dollar.
  • The euro fell less than 0.05 percent to $1.1833.


Bonds

  • The yield on 10-year Treasuries fell one basis point to 3.06 percent.
  • Australia’s 10-year yield rose six basis points to 2.887 percent.


Commodities

  • West Texas Intermediate crude fell 0.4 percent to $71.00 a barrel.
  • Gold rose 0.2 percent to $1,293.40 an ounce.
  • LME copper rose 0.1 percent to $6,815.00 per metric ton.

More from Bloomberg.com

Read Asian Stocks Decline as U.S. Treasury Yields Climb: Markets Wrap on bloomberg.com