Asian Stock Market: Japan’s Nikkei 225 leads the bears as US T-bond yields slump


  • Asian shares print losses amid fears of Fed rate-hike, tapering.
  • US inflation expectations drag Treasury yields, deadlock over US infrastructure spending talks adds to the bearish moves.
  • Downbeat Aussie Retail Sales, PBOC inaction exert additional downside pressure.
  • Fedspeak becomes the key directive after hawkish FOMC, T-bond yields eyed.

Equity markets in Asia keep the red amid escalating woes over the US Federal Reserve’s (Fed) monetary policy adjustments. The same joins down Treasury yields to weigh on the market sentiment during early Monday.

That said, MSCI’s index of Asia-Pacific shares ex-Japan drops 1.3% whereas Japan’s Nikkei 225 refreshes monthly low to become the biggest loser of the region, down 3.70% by the press time of the pre-European session.

Australia’s ASX 200 comes second in the list of bears as it drops around 1.9% following the downbeat prints of preliminary Retail Sales for May. Further, stocks from Taiwan, South Korea and New Zealand were losing anywhere between 1.5% to 1.0% whereas Chinese indicates were on the same line even as the People’s Bank of China (PBOC) kept monetary policy unchanged.

Indonesia’s IDX and India’s BSE Sensex were also on the back foot, losing around 0.80% by the time of the press, amid broad fears of a halt to the easy money policies.

It’s worth noting stock futures in the west are also on the back foot whereas the US Treasury yields refresh four-month low as the 30-year T-bond yields drop below 2.0% to flatten the curve further.

Read: S&P 500 Futures refresh monthly low as US Treasury yields drop to four-month bottom

Other than the fears of the monetary policy normalization, a lack of progress over the US President Joe Biden’s infrastructure and spending plan as well as rising worries over the Delta variant of the covid also please the equity bears.

As the global markets jostle with the increased odds of the US monetary policy adjustments, further comments from the Fed policymakers become important. Hence, today’s speech from New York Fed President John C. Williams will be the key to follow for fresh impulse.

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