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Asian stocks see soft retreat as bond yields give investors cause for concern

  • Asian equities see declines at the hands of climbing US Treasuries.
  • China markets evade the fallout for now with the nation off for the week.

Asian stock markets remain befuddled, with indexes continuing to lean towards the downside as rising US bond yields force traders to stop in their tracks.

US Treasury yields clipped into a seven-year high this week, forcing global equities to take a step lower, with tech stocks bearing the brunt of the sell-off. Risk-averse investors have hammered stocks as the US Treasury 10-year yield spiked to 3.232% as the US Federal Reserve gears up for a furious pace of interest rate hikes to come through 2019.

Chinese equity markets have evaded this week's Treasury-fueled sell-off, with the entire country's institutions off for the entire week in celebration of the Nation Day holiday; in Japan, Tokyo's Topix index is down -0.16% for Friday, with the Nikkei 225 retreating by -0.53%.

Australia's ASX 200 index remains in the green for the day, sitting at 0.16% thanks in part to today's Australian Retail Sales figures which beat expectations (0.3%, forecast 0.2%, last 0.0%), while emerging markets continue to show weakness to the downside, with the MSCI broad Asia-Pacific index in the red by -1.06% as Treasury yields crush wide-flung markets.

Nikkei 225 levels to watch

Japan's leading Nikkei 225 index has fallen back slightly from recent 27-year highs at 24,450, and the index is testing into 23,870 as the week draws to a close in Asia, with little support baked into the Nikkei's chart until the last major resistance-turned-support zone from the 23,000 handle.

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Joshua Gibson

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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