Japan’s Nikkei leads losses in Asian markets amid the fear of rate hike, China property market woes

Asian stocks mostly trades lower on Thursday in subdued trading.
Investors worried about China's property woes after Evergrande Chairman had been placed under police watch.
The possible higher US interest rates and rising Treasury yields weigh on heavyweight technology stocks in Japan.
The US Core Personal Consumption Expenditure (PCE) Price Index on Friday will be a closely watched event.

Lallalit Srijandorn FXStreet

Most Asian stock markets trade lower on Thursday as investors were concerned about the possible additional interest rate hike from the Federal Reserve (Fed) this year.

At press time, China’s Shanghai is up 0.15% to 3,111, the Shenzhen Component Index rises 0.08% to 10,112, Hong Kong’s Hang Sang drops 0.88% to 17,458, South Japan’s Nikkei falls 1.76% and trading was closed in South Korea for a holiday.

Meanwhile, September is on course to be the worst month of the year for the S&P 500 as the market attempts to digest a rise in Treasury yields to levels not seen since 2007. The US Dollar Index (DXY) climbs to 106.65, the highest since November. The 10-year Treasury yield settled at 4.60%, its highest level since 2007.

Trading in China Evergrande Group shares was halted on Thursday after a report that its Chairman Hui Ka Yan had been placed under police watch, raising fears about the cash-strapped developer's future amid mounting liquidation risk.

Evergrande is the world's most indebted real estate developer, and it is at the heart of a property market crisis that is dragging down China's economic development.

The prospect of higher US interest rates and rising Treasury yields weigh on heavyweight technology stocks in Japan. Meanwhile, USD/JPY currently trades near the 150.00 mark on Thursday, which triggers some fear that Japanese authorities would take action to address the Japanese Yen's depreciation. On Wednesday, Japanese Finance Minister Shunichi Suzuki is back on the wires with some verbal intervention. Suzuki said once again that he was watching FX with a sense of urgency.

Looking ahead, market players await the US weekly Jobless Claims report, the third revision of Gross Domestic Product (GDP) for the second quarter, and Pending Home Sales data due later on Thursday. The attention will shift to the US Core Personal Consumption Expenditure (PCE) Price Index on Friday.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.