SINGAPORE, Oct 20 (Reuters) – Asian stock markets fell on Thursday as investor fears of a looming recession weighed on risk appetite, while Treasury yields rose on expectations that the Federal Reserve would remain aggressive in its interest rate hikes.
The Japanese yen slipped near the psychological barrier of 150 to the dollar after hitting a fresh 32-year low at 149.93 earlier.
The yield on the 10-year US Treasury US10YT=RR hit a new 14-year high, sweeping away a weak housing report. US 10-year yields last rose to 4.139%, above the high of 4.136% hit earlier.
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“Yields have reached new cycle highs and risk appetite has eroded,” said Taylor Nugent, a market economist at National Australia Bank in Sydney, adding that hawkish comments from central banks were also weighing on the market. the feeling.
Wall Street recorded a two-day winning streak on Wednesday as the dollar rebounded from two-week lows.
MSCI’s broadest Asia-Pacific ex-Japan equity index (.MIAPJ0000PUS) fell to 436.0, its lowest level in more than two years, and fell 1.6% to 437.16,
Australia’s S&P/ASX 200 Index (.AXJO) was down 1.12%, while Japan’s Nikkei (.N225) opened 1% lower at 26,981.75 on Thursday.
China’s stock market (.SSEC) opened 0.5% lower as the ruling Communist Party’s congress continues this week.
On Thursday, China kept its benchmark lending rates unchanged for a second straight month as authorities delayed triggering more monetary stimulus to avoid a sharp policy divergence with other major economies.
In currency markets, the U.S. dollar strengthened as investors flocked to safe haven after inflation data across the world raised concerns that central banks would continue to hike interest rates.
On Wednesday, Minneapolis Federal Reserve Chairman Neel Kashkari said labor market demand remained strong and underlying inflationary pressures likely hadn’t peaked yet.
The US central bank is expected to raise rates by 75 basis points for the fourth straight time at its November meeting.
Still, the Fed’s “Beige Book” survey of economic activity showed there had been some easing in several districts, but businesses noted pricing pressures remained elevated.
The rising dollar and yields pushed gold lower, with prices remaining at a three-week low on Thursday. /GOL
The fragile yen has been on a losing streak for 11 straight sessions as of Wednesday’s close and has renewed its 32-year low over the past six sessions. /FRX
“The ever-present threat of official FX intervention is perhaps slowing the pace we might have otherwise seen given rising global rates,” National Australia Bank’s Nugent said.
Last month, Japan intervened in the foreign exchange market to buy yen for the first time since 1998, in an attempt to shore up the struggling currency.
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Reporting by Ankur Banerjee in Singapore; Editing by Stephen Coates
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