BANGKOK – Shares fell in Asia on Wednesday, while investors weighed on the possibility of inflation causing central banks to adjust their ultra-low interest rate policies.
Hang Seng HSI in Hong Kong,
led the decline, losing 2%. Nikkei 225 NIK in Tokyo,
paid 0.9% in Seoul Kospi 180721,
0.9% lower. S & P / ASX 200 XJO from Australia,
lost 1%, while the Shanghai Composite SHCOMP index,
gave up 1.5%. Stocks earned in Singapore STI,
but slipped into Taiwan Y9999,
and Indonesia JAKIDX,
Investors remain increasingly focused on the large increase in bond yields and how it affects stock valuations.
The large amount of stimulus that is pumped into savings has been a factor in raising higher bond yields, giving some investors a break as it reinvigorates inflation concerns that have been virtually non-existent for more than a decade.
The yield on the 10-year treasury note, which rose recently, was steady at 1.34% on Wednesday.
As bond yields rise, stock prices tend to be adversely affected, as investors direct an increasing share of their money to the steady stream of income that bonds provide.
Federal Reserve Chairman Jay Powell told Congress Tuesday that the Fed did not see the need to change its policy of maintaining ultra-low interest rates, noting that the economic recovery “remains uneven and far from complete.”
The message seemed to be disabled in Asia.
“Rising borrowing costs remain the predominant issue, although the Fed Powell’s obvious remarks helped halt the fall in U.S. stocks on Tuesday,” IG’s Jingyi Pan said in a comment.
However, “Despite reassuring comments about lower rates by US Federal Reserve Chairman Jerome Powell, Asian markets continued to worry about rising bond yields,” Pan said.
An explosion of late-afternoon shopping on Wall Street helped reverse most technology-driven sales on Tuesday, pushing the S&P 500 SPX
until his first win after a five-day losing streak.
The reference index increased by 0.1% to 3,881.37. Dow Jones Industrial Average DJIA,
it also increased by 0.1% to 31,537.35. Nasdaq Company,
lost 0.5% to 13,465.20. The indices were at historic highs less than two weeks ago.
In other transactions, US reference oil CLJ21,
lost 52 cents to $ 61.15 a barrel in electronic trading on the New York Mercantile Exchange. It lost 3 cents on Tuesday to $ 61.67 a barrel. Brent gross BRNJ21,
the international standard, lost 39 cents to $ 64.09 a barrel.
US Dollar USDJPY,
rose to 105.44 Japanese yen from 105.24 yen late Tuesday.